https://hdl.handle.net/10259/7380 2026-10-11T18:11:59Z https://hdl.handle.net/10259/12259 Formal institutions, ICSID arbitration and firm performance: evidence from Latin America Enríquez-Perales, Sarela; García Gómez, Conrado Diego; Díez Esteban, José María; Lizarzaburu Bolaños, Edmundo 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. 2023-01-01T00:00:00Z https://hdl.handle.net/10259/12257 Climate vulnerability and market volatility: evidence from European firms Enríquez-Perales, Sarela; García Gómez, Conrado Diego; Díez Esteban, José María This study examines the association between country-level climate vulnerability and firm-level stock return volatility in Europe. Using panel data on 490 listed firms across 17 European countries from 2013 to 2022, we find that firms located in more climate-vulnerable countries exhibit significantly higher market volatility. The results are robust across alternative measures, fixed-effects specifications, and endogeneity checks. We further show that this relationship is amplified for financially constrained firms when constraints are measured using the Kaplan–Zingales index. Overall, the findings suggest that climate vulnerability primarily manifests as heightened market uncertainty and that financial frictions play a key role in transmitting macro-level climate risk to firm-level market volatility. 2026-01-01T00:00:00Z https://hdl.handle.net/10259/12255 Corporate risk and formal institutions: is Latin America different? Lizarzaburu Bolaños, Edmundo; García Gómez, Conrado Diego; López Iturriaga, Félix Javier; Díez Esteban, José María This study investigates the relationship between institutional quality and corporate risk in Latin America. Using a sample of 725 firms from Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru, and Uruguay over the period 2013-2022, we find that firms operating in countries with stronger formal institutions –as measured by the World Bank's Worldwide Governance Indicators– exhibit lower levels of corporate risk, as captured by reduced Z-scores and market volatility. These results are robust to the use of a composite index based on the six dimensions of the governance indicators and to various empirical techniques. Furthermore, our results suggest that capital market integration –measured through participation in the Latin American Integrated Market (MILA)– reinforces the risk-reducing effect of institutional quality. Moreover, the moderating influence of the MILA is particularly relevant in financially constrained firms. 2026-01-01T00:00:00Z https://hdl.handle.net/10259/12251 Investment inefficiency in the hospitality industry: the role of economic policy uncertainty García Gómez, Conrado Diego; Demir, Ender; Díez Esteban, José María; Popesko, Boris Corporate investment inefficiency in the hospitality industry is an understudied topic. In this paper, we examine the effect of Economic Policy Uncertainty (EPU) on the investment inefficiency of a sample of 213 hospitality firms in the U.S. for the period 2010–2019. The results reveal that a rise in economic policy uncertainty leads to an increase in firm-level investment inefficiency in the hospitality industry. The underinvestment and the overinvestment problems are exacerbated by uncertainty. The results are robust for different variables specification and econometric techniques. Policy implications are also provided. 2023-01-01T00:00:00Z