Quotation Bellak, Christian, Leibrecht, Markus. 2020. The Association of Economic Crises and Investor-State Arbitration Cases. ASSA 2020 Annual Meeting, San Diego/ CA, Vereinigte Staaten/USA, 03.01.-05.01.


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Abstract

The number of investor-state arbitration disputes has been on the rise since the mid-1990s, but their determinants are still not fully understood. This study empirically examines the association of economic crises with investor-state arbitration claims. Economic crises frequently lead to regulatory changes which, in turn, may breach protection standards provided to international investors by international investment agreements (IIAs). We use a unique country-dyadic dataset containing 961 investor-state arbitration claims over the 1987-2017 period. We find that episodes of economic crises are positively associated with the number of investor-state arbitration cases. Furthermore, our results indicate that strength and timing of the crisis impact varies across different types of economic crisis and across countries with weak and strong institutions. Inflation and exchange rate-based crises show a lower time lag compared to economic growth crises. The impact of sovereign debt crisis is strongest. Taken together our investigation suggests that governments risk paying compensation to foreign investors for their actions in times when public spending is needed in other areas.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title The Association of Economic Crises and Investor-State Arbitration Cases
Event ASSA 2020 Annual Meeting
Year 2020
Date 03.01.-05.01.
Country United States/USA
Location San Diego/ CA
URL https://www.aeaweb.org/conference/2020/preliminary?q=eNqrVipOTSxKzlCyqgayiosz8_NCKgtSkbhKVkqGSrU6SonFxfnJQI6SjlJJalEukJWUmpOTmA3kpyRWQiUyc1MhrLLM1HKQIUUFBUABUwOl2tpaXDCBuCGv
JEL Financial Crises / International Investment and Lo

Associations

People
Bellak, Christian (Details)
Leibrecht, Markus (Former researcher)
Organization
Department of Economics (Weiss) (Details)
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