Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242005 
Year of Publication: 
2021
Citation: 
[Journal:] Review of International Economics [ISSN:] 1467-9396 [Volume:] 29 [Issue:] 4 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2021 [Pages:] 1013-1024
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
This paper shows that investor-state dispute settlements (ISDS) make multinational firms more aggressive by increasing cost-reducing investments with the aim to enlarge the potential compensation an ISDS provision may offer. While a larger investment reduces the market distortion, it will also make potential compensations larger. Consequently, potential compensations to a foreign investor do not imply a zero-sum game. ISDS may decrease domestic welfare, in particular if the investment leads to the establishment of an export platform, and we find that even global welfare may decline.
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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