The Home Court Advantage in International Corporate Litigation

58 Pages Posted: 21 Nov 2005 Last revised: 23 Jun 2008

See all articles by Utpal Bhattacharya

Utpal Bhattacharya

HKUST Business School

Neal Galpin

Monash University - Department of Banking and Finance

Bruce Haslem

Southern Utah University - Department of Economics and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: August 2006

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. We find that this market reaction is rational; U.S. firms are less likely to lose than foreign firms controlling for year, industry, type of litigation, size and profitability. This may still reflect a sample selection bias. We control for this bias, and the results remain. We thus cannot rule out that U.S. firms have a home court advantage in U.S. federal courts.

Keywords: Corporate litigation, ADR, event study, home bias

JEL Classification: G12, G15, K40, N20

Suggested Citation

Bhattacharya, Utpal and Galpin, Neal E. and Haslem, Bruce, The Home Court Advantage in International Corporate Litigation (August 2006). AFA 2006 Boston Meetings Paper, FSU College of Law, Law, Business & Economics Paper No. #, Available at SSRN: https://ssrn.com/abstract=509008 or http://dx.doi.org/10.2139/ssrn.509008

Utpal Bhattacharya (Contact Author)

HKUST Business School ( email )

Clear Water Bay
Kowloon
Hong Kong

Neal E. Galpin

Monash University - Department of Banking and Finance ( email )

Melbourne
Australia

Bruce Haslem

Southern Utah University - Department of Economics and Finance ( email )

Cedar City, UT 84720
United States

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