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Do lawyers induce litigation? Evidence from Spain, 2001–2010

Author

Listed:
  • Mora-Sanguinetti, Juan S.
  • Garoupa, Nuno

Abstract

There are important theoretical reasons to support the idea that lawyers induce litigation. However, estimating empirically that relationship is problematic given a standard endogeneity problem: if lawyers generate litigation, additional litigation attracts more lawyers. According to recent studies, Spain has more litigation and more lawyers per capita than most OECD countries. In this paper we test for the relationship between the number of lawyers and litigation in Spain by making use of instrumental variables, in the period 2001–2010. Specifically, we construct two groups of instrumental variables related to the number of law schools founded in Spain by 1968 and to the distance between the current provincial capitals to the historical capital of their university district (where it was possible to study law) in 1845. The results show that the number of lawyers has a positive effect on litigation. However, from our econometric analysis we do not find an obvious problem of simultaneity for the period considered. Policy implications are derived.

Suggested Citation

  • Mora-Sanguinetti, Juan S. & Garoupa, Nuno, 2015. "Do lawyers induce litigation? Evidence from Spain, 2001–2010," International Review of Law and Economics, Elsevier, vol. 44(C), pages 29-41.
  • Handle: RePEc:eee:irlaec:v:44:y:2015:i:c:p:29-41
    DOI: 10.1016/j.irle.2015.06.003
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    References listed on IDEAS

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    1. Gerhard Clemenz & Klaus Gugler, 2000. "Macroeconomic Development and Civil Litigation," European Journal of Law and Economics, Springer, vol. 9(3), pages 215-230, May.
    2. Tom Ginsburg & Glenn Hoetker, 2006. "The Unreluctant Litigant? An Empirical Analysis of Japan’s Turn to Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 31-59, January.
    3. Amanda Carmignani & Silvia Giacomelli, 2010. "Too many lawyers? Litigation in Italian civil courts," Temi di discussione (Economic working papers) 745, Bank of Italy, Economic Research and International Relations Area.
    4. Miguel García-Posada & Juan Mora-Sanguinetti, 2015. "Does (average) size matter? Court enforcement, business demography and firm growth," Small Business Economics, Springer, vol. 44(3), pages 639-669, March.
    5. Hanssen, F Andrew, 1999. "The Effect of Judicial Institutions on Uncertainty and the Rate of Litigation: The Election versus Appointment of State Judges," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 205-232, January.
    6. Posner, Richard A, 1997. "Explaining the Variance in the Number of Tort Suits across U.S. States and between the United States and England," The Journal of Legal Studies, University of Chicago Press, vol. 26(2), pages 477-489, June.
    7. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    8. Florian Baumann & Tim Friehe, 2012. "Contingent fees meet the British rule: an exploratory study," Public Choice, Springer, vol. 150(3), pages 499-510, March.
    9. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
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    Citations

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    Cited by:

    1. Juan S. Mora-Sanguinetti & Marta Martínez-Matute, 2018. "An economic analysis of court fees: evidence from the Spanish civil jurisdiction," Working Papers 1846, Banco de España;Working Papers Homepage.
    2. repec:eur:ejesjr:223 is not listed on IDEAS
    3. repec:eur:ejisjr:216 is not listed on IDEAS
    4. repec:kap:ejlwec:v:44:y:2017:i:2:d:10.1007_s10657-016-9543-2 is not listed on IDEAS
    5. repec:kap:ejlwec:v:44:y:2017:i:2:d:10.1007_s10657-017-9557-4 is not listed on IDEAS
    6. repec:eee:irlaec:v:53:y:2018:i:c:p:9-22 is not listed on IDEAS
    7. Juan S. Mora-Sanguinetti & Marta Martínez-Matute & Miguel García-Posada, 2017. "Credit, crisis and contract enforcement: evidence from the Spanish loan market," European Journal of Law and Economics, Springer, vol. 44(2), pages 361-383, October.

    More about this item

    Keywords

    Lawyers; Litigation; Civil courts; Instrumental variables;

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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