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SUMMARY:What is the Value of the Court System for Firms?
DTSTART:20151020T120000
DTEND:20151020T130000
DTSTAMP:20260916T153720Z
UID:098b8dc5e050c942bf19ef0d9790f7c26cec448cf9ba9f8b7044b4b6
CATEGORIES:Conferences - Seminars
DESCRIPTION:Christoph HERPFER (PhD Student\, SFI@EPFL)\nWe exploit a U.S. 
 Supreme Court ruling on diversity of citizenship in legal disputes to esti
 mate the contribution of the court system to firm value. In an event study
 \, we find that an increase in state court quality from bottom to top terc
 ile is associated with an average increase in equity value of 0.45%\, or a
 bout $8.7 million on the event day. This effect appears to be driven by co
 urts' attitude towards businesses more than by their competency and is mor
 e pronounced for firms in industries with high litigation risk. We also te
 st whether firms benet from the ability to steer lawsuits into friendly co
 urts\, so called forum shopping. We provide evidence that a reduction in f
 irms' ability to forum shop decreases firm value\, whereas a reduction in 
 plaintis' ability to forum shop increases firm value. We further document 
 that the ruling had signicant real effects. Firms which previously stayed 
 out of regions with potentially problematic courts subsequently increased 
 their operations in those regions.  Throughout our analysis we exploite a
  previously unused source of geographic heterogeneity in treatment for U.S
 . Supreme Court rulings\, namely varying  interpretations of the same law
 s across different federal circuits\, so called "circuit splits". 
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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