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On the effect of investment disputes on bilateral portfolio investment in emerging markets

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  • Nauerth, Jannik A.

Abstract

This paper investigates the effect of arbitral proceedings on bilateral portfolio equity investments in emerging markets. Investment disputes may deter foreign investors as they reveal a government's poor behavior towards foreign investors. The analysis investigates the effects of the first initiation of arbitral proceedings, the first outcome in favor of the investor, and the first outcome in favor of the respondent state of arbitration proceedings. The database is an unbalanced panel of 55 home and 36 host countries from 2001 to 2018. Estimations do not reveal an unconditionally significant effect of arbitral proceedings on bilateral portfolio equity holdings. The impact becomes significant considering the interplay with bilateral investment treaties and political risk.

Suggested Citation

  • Nauerth, Jannik A., 2023. "On the effect of investment disputes on bilateral portfolio investment in emerging markets," CEPIE Working Papers 01/23, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    • Handle: RePEc:zbw:tudcep:283576
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    References listed on IDEAS

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    1. Erasmo Giambona & John R Graham & Campbell R Harvey, 2017. "The management of political risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(4), pages 523-533, May.
    2. Head, Keith & Mayer, Thierry & Ries, John, 2010. "The erosion of colonial trade linkages after independence," Journal of International Economics, Elsevier, vol. 81(1), pages 1-14, May.
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    More about this item

    Keywords

    Investment disputes; Arbitration proceeding; Bilateral portfolio investment; Bilateral investment treaty; Investment protection; Emerging markets;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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