| Περίληψη : | The present thesis attempts to provide an empirical perspective on the expected impact that a trend towards rolling back ISDS would have on firm-level profits. This is done through an event study examination of the relationship between the presence of an ISDS mechanism in an IIA and investor confidence. Specifically, we ask the question: how do investors react to announcements regarding the prospect of limited ISDS benefits in a trade and investment treaty that is under negotiation? The underlying purpose of this exercise is to examine how investors view ISDS, in terms of its availability alone, from a profit-enhancing perspective. Do they consider their exclusion from access to ISDS in atrade and investment agreement, in and of itself, an indication of future losses/loss of profits for the firm? Depending on the findings from such an empirical study, certain conclusions could be drawn as to how integral a part of modern international economic cooperation treaties investors consider ISDS to be. We view the case of the TPP’s so-called ‘tobacco carve-out’ as providing a unique opportunity to perform an empirical study such as the one delineated above. Given that this provision directly affected one particular industry as far as access to ISDS under the treaty is concerned, this enables us to examine whether certain news related to the negotiations preceding the provision’s final unveiling were followed by abnormally negative returns in the stocks of affected US tobacco companies. In other words, in light of the considerable political pressure that the tobacco industry channeled towards avoiding limitations on its ISDS benefits in the TPP, did those tobacco companies potentially affected by an ISDS carve-out ‘put their money were their mouth is’? To our knowledge, the present thesis constitutes the first endeavour to employ an event study approach in examining the impact of a specific provision in an international trade and/or investment agreement on investor confidence.
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