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

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  • 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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    3. 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.
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    Cited by:

    1. Virginia Rosales & Dolores Jiménez-Rubio, 2017. "Empirical analysis of civil litigation determinants: The Case of Spain," European Journal of Law and Economics, Springer, vol. 44(2), pages 321-338, October.
    2. Lampach, Nicolas & Wijtvliet, Wessel & Dyevre, Arthur, 2020. "Merchant hubs and spatial disparities in the private enforcement of international trade regimes," International Review of Law and Economics, Elsevier, vol. 64(C).
    3. Bielen, Samantha & Peeters, Ludo & Marneffe, Wim & Vereeck, Lode, 2018. "Backlogs and litigation rates: Testing congestion equilibrium across European judiciaries," International Review of Law and Economics, Elsevier, vol. 53(C), pages 9-22.
    4. Doménech-Pascual, Gabriel & Martínez-Matute, Marta & Mora-Sanguinetti, Juan S., 2021. "Do fee-shifting rules affect plaintiffs’ win rates? A theoretical and empirical analysis," International Review of Law and Economics, Elsevier, vol. 65(C).
    5. Juan S. Mora-Sanguinetti & Marta Martínez-Matute, 2019. "An economic analysis of court fees: evidence from the Spanish civil jurisdiction," European Journal of Law and Economics, Springer, vol. 47(3), pages 321-359, June.
    6. Juan S. Mora-Sanguinetti & Ricardo Pérez-Valls, 2020. "¿Cómo afecta la complejidad de la regulación a la demografía empresarial? Evidencia para España," Working Papers 2002, Banco de España.
    7. de Lucio, Juan & Mora-Sanguinetti, Juan S., 2022. "Drafting “better regulation”: The economic cost of regulatory complexity," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 163-183.
    8. Giuseppe Di Vita, 2023. "The economic impact of legislative complexity and corruption: A cross‐country analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1801-1825, April.
    9. Umberto Nizza, 2023. "The expertise effect: the impact of legal specialists’ intervention on the timely delivery of laymen's judgments," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 589-614, July.
    10. Juan de Lucio & Juan S. Mora-Sanguinetti, 2021. "New dimensions of regulatory complexity and their economic cost. An analysis using text mining," Working Papers 2107, Banco de España.
    11. Pamela Denice Arao & Danyel Brendan Arizabal & Seanne Veniene Esguerra, 2018. "Investment Trios Are Less Prone to the Hot Hand and Gambler’s Fallacies and Make Better Investment Strategies," European Journal of Interdisciplinary Studies Articles, Revistia Research and Publishing, vol. 4, May - Aug.
    12. Daniel Dejuán & Juan S. Mora-Sanguinetti, 2019. "Quality of enforcement and investment decisions. Firm-level evidence from Spain," Working Papers 1927, Banco de España.
    13. Dejuan-Bitria, Daniel & Mora-Sanguinetti, Juan S., 2021. "Which legal procedure affects business investment most, and which companies are most sensitive? Evidence from microdata," Economic Modelling, Elsevier, vol. 94(C), pages 201-220.
    14. 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.
    15. Juan S. Mora-Sanguinetti & Ricardo Pérez-Valls, 2021. "How does regulatory complexity affect business demography? Evidence from Spain," European Journal of Law and Economics, Springer, vol. 51(2), pages 203-242, April.
    16. Jonathan Torres‐Tellez & Alberto Montero Soler, 2023. "After the economic crisis of 2008: Economic conditions and crime in the last decade for the case of Spain," American Journal of Economics and Sociology, Wiley Blackwell, vol. 82(3), pages 223-239, May.
    17. Prof. Dr.Sejdi Rexhepi & Mjellma Kadriu, 2018. "The Importance of Resource Assessment for Entrepreneurship and Local Economic Development in Kosovo," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 4, January -.
    18. Antonio Peyrache & Angelo Zago, 2020. "The (in)efficiency of Justice. An equilibrium analysis of supply policies," CEPA Working Papers Series WP042020, School of Economics, University of Queensland, Australia.

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    More about this item

    Keywords

    Lawyers; Litigation; Civil courts; Instrumental variables;
    All these keywords.

    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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