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ISDS disputes, adjudication and cross-border M&As

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  • Du, Julan
  • Zhang, Yifei

Abstract

ISDS claims are associated with reductions in the likelihood, frequency, and dollar volume of M&As from claimant home countries to respondent states. The host-state expropriation events underlying ISDS claims show no significant effects. The impact of ISDS claims remains after including traditional country risk metrics. Thus, ISDS claims play a unique role in guiding international investment. They prompt foreign acquirers to adopt risk-avoiding strategies, which affect various deal characteristics. We detect strong substantiation effects of investor-win cases and some acquittal effects of state-win cases. The ISDS claims related to direct expropriations and strong-institution respondent states typically produce more striking effects.

Suggested Citation

  • Du, Julan & Zhang, Yifei, 2024. "ISDS disputes, adjudication and cross-border M&As," Journal of Corporate Finance, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:corfin:v:87:y:2024:i:c:s0929119924000567
    DOI: 10.1016/j.jcorpfin.2024.102594
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    References listed on IDEAS

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    More about this item

    Keywords

    ISDS disputes; Host state expropriation events; Cross-border merger deals; Direct and indirect expropriations; Merger deal characteristics;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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