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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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  • Baker, Matthew J & Cunningham, Brendan M, 2006. "Court Decisions and Equity Markets: Estimating the Value of Copyright Protection," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 567-596, October.
    • Handle: RePEc:ucp:jlawec:y:2006:v:49:i:2:p:567-96
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    Cited by:

    1. Felix Oberholzer-Gee & Koleman Strumpf, 2010. "File Sharing and Copyright," Innovation Policy and the Economy, University of Chicago Press, vol. 10(1), pages 19-55.
    2. Stoneman, Paul, 2011. "Soft Innovation: Economics, Product Aesthetics, and the Creative Industries," OUP Catalogue, Oxford University Press, number 9780199697021.
    3. 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.
    4. Christine Greenhalgh & Mark Rogers, 2007. "The Value of Intellectual Property Rights to Firms," Economics Series Working Papers 319, University of Oxford, Department of Economics.
    5. Depoorter Ben & Holland Adam & Somerstein Elizabeth, 2009. "Copyright Abolition and Attribution," Review of Law & Economics, De Gruyter, vol. 5(3), pages 1063-1080, December.
    6. 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.
    7. 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, September.
    8. Ivan Png & Qiu-hong Wang, 2007. "Copyright Duration and the Supply of Creative Work," Levine's Working Paper Archive 321307000000000478, David K. Levine.
    9. Handke, Christian & Girard, Yann & Mattes, Anselm, 2015. "Fördert das Urheberrecht Innovation? Eine empirische Untersuchung," Studien zum deutschen Innovationssystem 16-2015, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    10. 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.
    11. Ivan Png, 2006. "Copyright: A Plea for Empirical Research," Levine's Working Paper Archive 321307000000000484, David K. Levine.

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