The Home Court Advantage in International Corporate Litigation

58 Pages Posted: 28 Sep 2006  

Utpal Bhattacharya

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

Neal Galpin

University of Melbourne - Department of Finance; Financial Research Network (FIRN)

Bruce Haslem

Southern Utah University - Department of Economics and Finance

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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, event studies, discrimination

JEL Classification: G14, G15, K40, N20

Suggested Citation

Bhattacharya , Utpal and Galpin, Neal and Haslem, Bruce, The Home Court Advantage in International Corporate Litigation. Journal of Law and Economics, 2006. Available at SSRN: https://ssrn.com/abstract=932690

Utpal Bhattacharya (Contact Author)

Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management ( email )

Clear Water Bay
Kowloon
Hong Kong

Neal E. Galpin

University of Melbourne - Department of Finance ( email )

Faculty of Economics and Commerce
Parkville, Victoria 3010 3010
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Bruce Haslem

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

Cedar City, UT 84720
United States

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