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

Josef Brada (), Chunda Chen, Jingyi Jia and Ali Kutan ()

No 10/2020, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition

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.

JEL-codes: F23 G14 K12 K33 (search for similar items in EconPapers)
Date: 2020-04-22
New Economics Papers: this item is included in nep-int, nep-law and nep-ore
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