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.

本文分析了一个国家的正式制度质量如何影响不同拉丁美洲国家（即阿根廷、巴西、哥伦比亚、墨西哥、秘鲁和智利）和行业的上市公司的业绩。由于该地区的体制高度不稳定性，拉丁美洲为解决这个问题提供了独特的环境。样本由 2004-2019 年期间的 571 家大型上市公司组成，共有 8576 个观察值。结果表明，一个国家的正规制度的质量与企业绩效呈正相关，通过两个替代变量（ROA 和托宾 Q）来衡量。此外，ICSID 协议的签署国为公司提供了更稳定的经商环境，最终对其业绩产生积极影响。然而，随着 ICSID 之前记录的案件数量的增加，这种关系变为负数。本文通过考虑六个可供选择的治理维度，提供了对正式制度的更全面的理解。此外，国际仲裁被认为可以替代拉丁美洲国家的正式机构。