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Abstract:
Classified boards constitute one of the most potent takeover defenses for U.S. firms today. However, as with takeover defenses more generally, economic theory offers an ambiguous prediction as to the effect that classified boards have on bottom-line firm value. A resolution of this ambiguity will require sound and convincing empirical methodology. In an effort to address limitations in the existing empirical literature, this article approaches the relationship between corporate governance and firm value while taking various measures to account for unobserved sources of heterogeneity across firms. Using the instrumental variables model developed by Hausman and Taylor, I find evidence of a negative and statistically significant association between classified board status and firm value. I confirm these findings using a variation of the difference-in- difference-in-difference model recently employed by Rauh. However, using quantile regressions, I find evidence suggesting that this negative association may be concentrated along the upper tail of the distribution of firm value.

delaware, journal, corporate, law, classified board, takeover defense, governance, firm value, frakes, quantile regressions, negative association

Abstract:
Physician practices vary in a striking and persistent manner across different regions of the United States. In this paper, I explore the association between regional variations in physician behavior and the geographical scope of the standards of care to which physicians are held in malpractice actions. Malpractice laws that require physicians to comply with the standards set by local physicians may help to perpetuate divergent practice patterns. The adoption of laws requiring physicians to comply with national standards of care, on the other hand, may lessen regional disparities by inducing physicians to practice closer to the national mean. Over time, most states have come to modify their malpractice laws in this latter direction. Drawing on this rich set of legal variations and using data on physician behavior from the 1977-2005 National Hospital Discharge Surveys, I test for evidence of convergence in state utilization rates towards national rates as states abandon the use of “locality” rules in favor of national standard-of-care laws. Focusing on obstetric practices, I document robust evidence of convergence in cesarean section utilization, whereby as much as 40-60% of the gap between state and national cesarean rates is closed upon the adoption of a national-standard rule.

malpractice, standard of care, regional variations, locality rule

Abstract:
We draw on within-state variations in the reach of capital punishment statutes between 1977 and 2004 to identify the deterrent effects associated with capital eligibility. Focusing on the most prevalent eligibility expansion, we estimate that the adoption of a child murder factor is associated with an approximately 20% reduction in the homicide rate of youth victims. Eligibility expansions may enhance deterrence by (1) paving the way for more executions and (2) providing prosecutors with greater leverage to secure enhanced non-capital sentences. While executions themselves are rare, this latter channel is likely to be triggered fairly regularly, providing a reasonable basis for a general deterrent response.

death penalty, deterrence, capital punishment

Abstract:
Using data on physician behavior from the 1979–2005 National Hospital Discharge Surveys (NHDS), I estimate the relationship between malpractice pressure, as identified by the adoption of non-economic damage caps and related tort reforms, and certain decisions faced by obstetricians during the delivery of a child. The NHDS data, supplemented with restricted geographic identifiers, provides inpatient discharge records from a broad enough span of states and covering a long enough period of time to allow for a defensive medicine analysis that draws on an extensive set of variations in relevant tort laws. Contrary to the conventional wisdom, I find no evidence to support the claim that malpractice pressure induces physicians to perform a substantially greater number of cesarean sections. Extending this analysis to certain additional measures, however, I do find some evidence consistent with positive defensive behavior among obstetricians. For instance, I estimate that the adoption of a non-economic damage cap is associated with a reduction in the utilization of episiotomies during vaginal deliveries, without a corresponding change in observed neonatal outcomes.

malpractice, defensive medicine, cesarean, damage cap

Abstract:
The strong negative correlation over time between smoking rates and obesity have led some to suggest that reduced smoking is increasing weight gain in the U.S. This conclusion is supported by the findings of Chou et al. (2004), who conclude that higher cigarette prices lead to increased body weight. We investigate this issue and find no evidence that reduced smoking leads to weight gain. Using the cigarette tax rather than the cigarette price and controlling for non-linear time effects, we find a negative effect of cigarette taxes on body weight, implying that reduced smoking leads to lower body weights. Yet our results, as well as Chou et al., imply implausibly large effects of smoking on body weight. Thus, we cannot confirm that falling smoking leads in a major way to rising obesity rates in the U.S.

Abstract:
While cesarean sections remain an important element of obstetric practices and provide benefits to a significant number of mothers, they may be utilized to such a great extent that they offer few benefits to those on the margin. In this paper, I evaluate the welfare consequences that may arise from excessive utilization of cesarean deliveries within regions. Using hospital discharge data from the 1979-2005 National Hospital Discharge Surveys, I first document robust evidence of triage in regional cesarean utilization. Specifically, I estimate that the predicted cesarean probability for the marginal mother - i.e., a parameterization of her “need” for cesarean delivery - is lower than that of the average mother by an amount that is nearly 60% of the average level. Moreover, using data from the 1978-2004 Natality Detail files, I find no evidence to suggest that an increase in regional cesarean rates is otherwise associated with a corresponding increase in average neonatal outcomes. In each such investigation, I identify the returns to regional cesarean intensities by drawing on an arguably exogenous source of convergence in regional cesarean rates resulting from the adoption of malpractice laws requiring that physicians follow national standards of care. Finally, following the analytical framework set forth in Chandra and Staiger (2007), I test for and find no robust evidence of an association between cesarean intensity levels and productivity spillovers, which may be of a nature that otherwise support an argument for increased regional specialization in delivery practices.

cesarean, c-section, overutilization, flat-of-the-curve medicine