Czech Mate: Expropriation and Investor Protection in a Converging World
Mihir A. Desai
Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)
Monitor Corporate Finance, Monitor Group
ECGI - Working Paper No. 62/2004
This paper examines the expropriation of a foreign investor by a local partner and the subsequent resolution of that case through international arbitration in favor of the investor. Despite the investor's 99% interest in joint venture, the local partner managed to divert the entire value of the underlying entity for his personal benefit. This clinical examination of an expropriation and its aftermath illustrates the interaction of property and contract rights in a global setting, how corporate control is shaped by geography, and how multinational firms may be advantaged by availing themselves of stronger investor protections than local firms.
Number of Pages in PDF File: 35
Keywords: Investor protections, corporate governance, expropriation, multinational firms, FDI, foreign direct investment, media, bilateral investment
JEL Classification: F21, F23, F36, F42, G15, G30
Date posted: September 6, 2004
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