Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240361 
Year of Publication: 
2020
Series/Report no.: 
BOFIT Discussion Papers No. 10/2020
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
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.
Subjects: 
bilateral investment treaties
international investment arbitration
foreign directinvestment
event studies
host country - investor disputes
JEL: 
F23
G14
K12
K33
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-323-2
Document Type: 
Working Paper

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