Does bilateral investment treaty arbitration have any value for multinational corporations?

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dc.contributor Bank of Finland Brada, Josef C. Chen, Chunda Jia, Jingyi Kutan, Ali M. 2020-04-23T10:11:54Z 2020-04-23T10:11:54Z 2020
dc.identifier.isbn 978-952-323-323-2
dc.identifier.issn 1456-5889
dc.description.abstract Using event study methodology, we investigate whether bilateral investment protection treaties afford protection to foreign investors. Examining arbitral decisions for firms from six countries shows that firms that received awards from arbitrators gained in market value by as much as 3%. Per dollar awarded, firms gained over $20 in market value. Thus, we conclude that the system of arbitration does afford significant benefits to firms that can demonstrate that they have been injured by host governments who violated the terms of the relevant investor protection treaty. We also find some evidence that arbitral decisions are anticipated by stock markets.
dc.description.tableofcontents Abstract .. 4 1 Introduction .. 5 2 Background and literature survey .. 7 A Bilateral investment treaties and the arbitration of disputes .. 7 B Effects of bilateral investment treaties on FDI .. 8 C Litigation and the value of the firm .. 9 3 Data and methodology .. 12 A Data .. 12 B Methodology .. 15 4 Results .. 17 A Excess returns from arbitral decisions .. 17 B Arbitral awards and firm value .. 21 C Does the market anticipate arbitral decisions prior to the announcement date? .. 22 5 Conclusions .. 23 References .. 25 Appendix .. 27
dc.format.extent 29
dc.language.iso ENG
dc.subject Bofit-kokoelma
dc.subject ulkomaiset sijoittajat
dc.subject.other bilateral investment treaties
dc.subject.other international investment arbitration
dc.subject.other host country – investor disputes
dc.subject.other event studies
dc.subject.other foreign direct investment
dc.title Does bilateral investment treaty arbitration have any value for multinational corporations?
dc.type Paper
dc.identifier.urn URN:NBN:fi:bof-202004232089
dc.subject.jel F23
dc.subject.jel G14
dc.subject.jel K12
dc.subject.jel K33 BOFIT Discussion Papers
dc.series.year 2020
dc.series.number 10/2020
dc.series.sortingnumber 0010 22.4.2020
dc.subject.yso suorat investoinnit
dc.subject.yso investoinnit
dc.subject.yso sijoittajat
dc.subject.yso sopimukset
dc.subject.yso sovittelu
dc.subject.yso yritykset
dc.subject.yso sijoittajansuoja
dc.contributor.orgunit Institute for Economies in Transition (BOFIT)
dc.type.okm D4

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