Investor-State Dispute Settlement and Multinational Firm Behavior

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Research 01 Jan 2017 Germany, Norway, Australia English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Guttorm Schjelderup; Frank Stähler;

doi: 10.2139/ssrn.3692921 , 10.2139/ssrn.2948306 , 10.1111/roie.12532 , 10.2139/ssrn.3682551

handle: 11250/2675550 , 11250/2437087 , 10419/226234 , 10419/242005 , 2440/136546

Investor-State Dispute Settlement and Multinational Firm Behavior

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Abstract

AbstractThis 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.

Countries

Germany, Norway, Australia

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Keywords

multinational enterprises, Multinational Enterprises, Mulitnational Enterprises, ddc:330, foreign direct investment, TTIP, Investor-State Dispute Settlement, Foreign Direct Investment, TPP, F21, F55, F23, F53, investor-state dispute settlement

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