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Court Decisions and Equity Markets: Estimating the Value of Copyright Protection

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  • Baker, Matthew J
  • Cunningham, Brendan M

Abstract

We construct a database of U.S. federal court decisions pertaining to copyright and changes in federal statutory copyright law and use this database to assemble indices measuring changes in the breadth of copyright protection. We combine our indices with information on excess returns to equity from a quarterly panel of firms and estimate how the breadth of copyright affects the market valuation of firm equity. A typical statute that increases copyright breadth generates an increase in a firm's excess return to equity of 40-209 basis points, depending on the exact time frame, the size of the firm, and the importance of the change in statutory law. A typical high-court decision expanding copyright generates a 13-105 basis-point increase in excess returns. Our results are robust across 4-5-year subsamples and the size distribution of firms. Our statutory findings are strongest in the most recent portion of the sample.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Law and Economics.

Volume (Year): 49 (2006)
Issue (Month): 2 (October)
Pages: 567-96

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Handle: RePEc:ucp:jlawec:y:2006:v:49:i:2:p:567-96

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  6. Novos, Ian E & Waldman, Michael, 1984. "The Effects of Increased Copyright Protection: An Analytic Approach," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(2), pages 236-46, April.
  7. Kai-Lung Hui & Ivan P.L. Png, 2002. "On the Supply of Creative Work: Evidence from the Movies," Law and Economics, EconWPA 0201002, EconWPA, revised 18 Jan 2002.
  8. B. Zorina Khan & Kenneth L. Sokoloff, 2001. "The Early Development of Intellectual Property Institutions in the United States," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 233-246, Summer.
  9. Towse, Ruth, 1999. "Copyright and Economic Incentives: An Application to Performers' Rights in the Music Industry," Kyklos, Wiley Blackwell, vol. 52(3), pages 369-90.
  10. Thomas J. Miceli & Richard P. Adelstein, 2005. "An Economic Model of Fair Use," Working papers, University of Connecticut, Department of Economics 2005-56, University of Connecticut, Department of Economics.
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  12. Stan J. Liebowitz & Stephen E. Margolis, 2005. "Seventeen Famous Economists Weigh In On Copyright: The Role Of Theory, Empirics, And Network Effects," Law and Economics, EconWPA 0505003, EconWPA.
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Cited by:
  1. Christine Greenhalgh & Mark Rogers, 2007. "The Value of Intellectual Property Rights to Firms," Discussion Papers, Stanford Institute for Economic Policy Research 06-036, Stanford Institute for Economic Policy Research.
  2. Jen-Te Yao, 2005. "How a Luxury Monopolist Might Benefit from a Stringent Counterfeit Monitoring Regime," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 4(3), pages 177-192, December.
  3. Stan J. Liebowitz & Richard Watt, 2006. "How To Best Ensure Remuneration For Creators In The Market For Music? Copyright And Its Alternatives," Journal of Economic Surveys, Wiley Blackwell, vol. 20(4), pages 513-545, 09.
  4. Bronwyn Hall & Christian Helmers & Mark Rogers & Vania Sena, 2014. "The Choice between Formal and Informal Intellectual Property: A Review," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 375-423, June.
  5. Felix Oberholzer-Gee & Koleman Strumpf, 2010. "File Sharing and Copyright," NBER Chapters, in: Innovation Policy and the Economy, Volume 10, pages 19-55 National Bureau of Economic Research, Inc.
  6. Ivan Png, 2006. "Copyright: A Plea for Empirical Research," Levine's Working Paper Archive 321307000000000484, David K. Levine.
  7. Ivan Png & Qiu-hong Wang, 2007. "Copyright Duration and the Supply of Creative Work," Levine's Working Paper Archive 321307000000000478, David K. Levine.

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