A COMPARATIVE ANALYSIS OF THE BENEFITS OF FREE TRADE AGREEMENTS ON FDI, BETWEEN DEVELOPED COUNTRIES & DEVELOPING COUNTRIES

In the uncertain world trade where the competition to attract FDI investments has grown manifold, the countries that want inward FDI and the countries that seek markets for their companies to invest into, are entering into free trade agreements and bilateral investment treaties to secure the same. Even with WTO functioning for the same, the developed as well as developing countries are forging FTAs with alarming alacrity. However, the effectiveness of the FTAs should be checked regarding the fulfilment of the objectives of these FTAs. The author, in this study, compares the benefits arising out of FTAs among OECD and Non – OECD countries to evaluate which agreements give better returns to their countries and what are the factors that affect these benefits accrued out of these agreements. 15 years data of FDI investment among OECD and Non – OECD countries is passed through multiple regressions and within estimator tests, with F-Tests and Hausman tests to understand the impact of FTAs on FDIs in two sets of home-host countries.