Value creation and value destruction in investor-state dispute arbitration

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2022-03-01 DOI:10.1016/j.mulfin.2021.100728

Josef C. Brada , Chunda Chen , Jingyi Jia , Ali M. Kutan , M. Fabricio Perez

引用次数: 0

Abstract

We investigate whether investor-state arbitration under investment protection treaties is valuable to foreign investors, and whether international arbitration has effects on firm value that are like those seen in domestic litigation. An event study of abnormal returns when claims for arbitration are filed and adjudicated show that firms gain in market value both at the time they file for arbitration and when they receive an award. These gains in value generally exceed the size of the awards, indicating that success in arbitration provides the foreign investor not only monetary compensation but also non-monetary reputational effects that reduce costs of doing business abroad. Stock markets anticipate the outcomes of the arbitration process when claims are filed and when awards are announced. The effects on firm value of domestic litigation and investor-state arbitration differ, reflecting the institutional differences between the two methods of resolving disputes.

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投资人与国家争议仲裁中的价值创造与价值破坏

我们研究投资保护条约下的投资者-国家仲裁是否对外国投资者有价值，以及国际仲裁是否对公司价值产生影响，就像在国内诉讼中看到的那样。一项关于仲裁请求提交和裁决时异常回报的事件研究表明，公司在提交仲裁和获得裁决时都获得了市场价值。这些价值的增长通常超过了裁决的数额，这表明仲裁的成功不仅为外国投资者提供了货币补偿，而且还提供了非货币的声誉效应，从而降低了在国外开展业务的成本。当索赔被提交和裁决被宣布时，股票市场会预测仲裁程序的结果。国内诉讼和投资者-国家仲裁对企业价值的影响不同，反映了两种纠纷解决方式的制度差异。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.