RT info:eu-repo/semantics/article
T1 Formal institutions, ICSID arbitration and firm performance: evidence from Latin America
A1 Enríquez Perales, Sarela
A1 García Gómez, Conrado Diego
A1 Díez Esteban, José María
A1 Lizarzaburu Bolaños, Edmundo R.
K1 Formal institutions
K1 ICSID
K1 Arbitration
K1 Firm performance
K1 Latin America
K1 53 Ciencias Económicas
K1 56 Ciencias Jurídicas y Derecho
AB This paper analyzes how a country’s formal institutional quality impacts the performance of listed companies across different Latin American countries (namely, Argentina, Brazil, Colombia, Mexico, Peru, and Chile) and industries. Latin America provides a unique setting to address this question due to the region’s high institutional instability. The sample consists of 571 large listed companies, with a total of 8576 observations, for the period 2004–2019. Results show that the quality of a country’s formal institutions is positively related to firm performance, measured through two alternative variables (ROA and Tobin’s Q). Additionally, countries that are signatories of the ICSID agreement provide companies with a more stable environment in which to do business, which ultimately has a positive impact on their performance. However, as the number of cases recorded before the ICSID increases, the relationship turns negative. The paper provides a more comprehensive understanding of formal institutions by considering six alternative governance dimensions. Moreover, international arbitration is found to be a substitute for formal institutions in Latin American countries.
PB Springer
SN 1309-4297
YR 2022
FD 2022
LK https://uvadoc.uva.es/handle/10324/53854
UL https://uvadoc.uva.es/handle/10324/53854
LA eng
NO Eurasian Business Review, 2022
NO Producción Científica
DS UVaDOC
RD 06-ago-2024