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The Home Court Advantage in International Corporate Litigation

  • Utpal Bhattacharya
  • Neal Galpin
  • Bruce Haslem

Using a comprehensive sample of 2,361 public U.S. corporate defendants and 715 public foreign corporate defendants in U.S. federal courts in the period 1995–2000, we find that the market reaction at the announcement of a U.S. federal lawsuit is less negative for U.S. corporate defendants than for foreign corporate defendants. We find that this market reaction is rational; U.S. firms are less likely to lose than are foreign firms when we control for year, industry, type of litigation, size, and profitability. This finding may still reflect a sample selection bias. We control for this bias, and the results remain unchanged. We thus cannot rule out that U.S. firms have a home court advantage in U.S. federal courts.

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File URL: http://dx.doi.org/10.1086/519817
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Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 50 (2007)
Issue (Month): ()
Pages: 625-660

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Handle: RePEc:ucp:jlawec:v:50:y:2007:p:625-660
DOI: 10.1086/519817
Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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