Lawyers: Gatekeepers of the Sovereign Debt Market?

47 Pages Posted: 30 Aug 2013 Last revised: 25 Dec 2014

See all articles by Michael Bradley

Michael Bradley

Duke University - Fuqua School of Business

Irving De Lira Salvatierra

Duke University

Mitu Gulati

University of Virginia School of Law

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Date Written: August 28, 2013

Abstract

The claim that lawyers act as gatekeepers or certifiers in financial transactions is widely discussed in the legal literature. There has, however, been little empirical examination of the claim. We test the hypothesis that law firms have replaced investment banks as the gatekeepers of the market for sovereign debt. Our results suggest that hiring outside law firms sends a negative signal to the market regarding the pending issuance; a finding that is inconsistent with the thesis that outside law firms primarily play a certification role in the sovereign debt market.

Keywords: Lawyers, Gatekeepers, Reputational Intermediaries, Sovereign Debt

Suggested Citation

Bradley, Michael and De Lira Salvatierra, Irving and Gulati, Mitu, Lawyers: Gatekeepers of the Sovereign Debt Market? (August 28, 2013). International Review of Law and Economics, Forthcoming, Economic Research Initiatives at Duke (ERID) Working Paper No. 162, Available at SSRN: https://ssrn.com/abstract=2317633

Michael Bradley

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
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Irving De Lira Salvatierra (Contact Author)

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Mitu Gulati

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

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