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Czech Mate: Expropriation and Investor Protection in a Converging World

35 Pages Posted: 6 Sep 2004  

Mihir A. Desai

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Alberto Moel

Monitor Corporate Finance, Monitor Group

Multiple version iconThere are 2 versions of this paper

Date Written: April 2006

Abstract

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.

Keywords: Investor protections, corporate governance, expropriation, multinational firms, FDI, foreign direct investment, media, bilateral investment

JEL Classification: F21, F23, F36, F42, G15, G30

Suggested Citation

Desai, Mihir A. and Moel, Alberto, Czech Mate: Expropriation and Investor Protection in a Converging World (April 2006). ECGI - Working Paper No. 62/2004. Available at SSRN: https://ssrn.com/abstract=585843 or http://dx.doi.org/10.2139/ssrn.585843

Mihir Desai (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6693 (Phone)
617-496-6592 (Fax)

Alberto Moel

Monitor Corporate Finance, Monitor Group ( email )

Two Canal Park
Cambridge, MA 02141
United States

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