IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/y2006v49i2p567-96.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/505372
    Download Restriction: Access to the online full text or PDF requires a subscription.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rick Harbaugh & Rahul Khemka, "undated". "Does Copyright Enforcement Encourage Piracy?," Claremont Colleges Working Papers 2000-14, Claremont Colleges.
    2. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-174, February.
    3. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
    4. Novos, Ian E & Waldman, Michael, 1984. "The Effects of Increased Copyright Protection: An Analytic Approach," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 236-246, April.
    5. Kai-Lung Hui, 2002. "On the Supply of Creative Work: Evidence from the Movies," American Economic Review, American Economic Association, vol. 92(2), pages 217-220, May.
    6. Kranenburg Hans van & Hogenbrink Annelies, 2003. "Determinants of Multimedia, Entertainment, and Business Software Copyright Piracy: A Cross-national Study," Research Memorandum 039, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    7. Louis K.C. Chan & Josef Lakonishok & Theodore Sougiannis, 1999. "The Stock Market Valuation of Research and Development Expenditures," NBER Working Papers 7223, National Bureau of Economic Research, Inc.
    8. Miceli, Thomas J. & Adelstein, Richard P., 2006. "An economic model of fair use," Information Economics and Policy, Elsevier, vol. 18(4), pages 359-373, November.
    9. Lamdin, Douglas J., 2001. "Implementing and interpreting event studies of regulatory changes," Journal of Economics and Business, Elsevier, vol. 53(2-3), pages 171-183.
    10. Carroll, Kathleen A & Lamdin, Douglas J, 1993. "Measuring Market Response to Regulation of the Cable TV Industry," Journal of Regulatory Economics, Springer, vol. 5(4), pages 385-399, December.
    11. Schwert, G William, 1981. "Using Financial Data to Measure Effects of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 24(1), pages 121-158, April.
    12. 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.
    13. 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 0505003, EconWPA.
    14. Towse, Ruth, 1999. "Copyright and Economic Incentives: An Application to Performers' Rights in the Music Industry," Kyklos, Wiley Blackwell, vol. 52(3), pages 369-390.
    15. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    16. Landes, William M & Posner, Richard A, 1989. "An Economic Analysis of Copyright Law," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 325-363, June.
    17. Eric Chiang & Djeto Assane, 2002. "Software copyright infringement among college students," Applied Economics, Taylor & Francis Journals, vol. 34(2), pages 157-166.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stoneman, Paul, 2011. "Soft Innovation: Economics, Product Aesthetics, and the Creative Industries," OUP Catalogue, Oxford University Press, number 9780199697021.
    2. Christine Greenhalgh & Mark Rogers, 2007. "The Value of Intellectual Property Rights to Firms," Economics Series Working Papers 319, University of Oxford, Department of Economics.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. Ivan Png, 2006. "Copyright: A Plea for Empirical Research," Levine's Working Paper Archive 321307000000000484, David K. Levine.
    8. 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.
    9. 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.
    10. Depoorter Ben & Holland Adam & Somerstein Elizabeth, 2009. "Copyright Abolition and Attribution," Review of Law & Economics, De Gruyter, vol. 5(3), pages 1063-1080, December.
    11. Ivan Png & Qiu-hong Wang, 2007. "Copyright Duration and the Supply of Creative Work," Levine's Working Paper Archive 321307000000000478, David K. Levine.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:y:2006:v:49:i:2:p:567-96. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JLE/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.