The Home Court Advantage in International Corporate Litigation
- 1 November 2007
- journal article
- Published by University of Chicago Press in The Journal of Law and Economics
- Vol. 50 (4), 625-660
- https://doi.org/10.1086/519817
Abstract
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.Keywords
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