Litigating innovation: Evidence from securities class action lawsuits


Kempf, Elisabeth ; Spalt, Oliver


URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Additional URL: https://editorialexpress.com/conference/AFA2019/pr...
Document Type: Conference presentation
Year of publication: 2019
Conference title: 2019 Annual Meeting and Panel Sessions, American Finance Association
Location of the conference venue: Atlanta, GA
Date of the conference: 04.-06.01.2019
Publication language: English
Institution: Business School > ABWL, Finanzwirtschaft u. Finanzmarktinstitutionen (Spalt 2019-)
Subject: 330 Economics
Abstract: Low-quality securities class action lawsuits disproportionally target firms with valuable innovation output and impose a substantial implicit "tax" on these firms. We establish this fact using data on class action lawsuits against U.S. corporations between 1996 and 2011 and the private economic value of a firm's newly granted patents as a measure of valuable innovation output. Our results challenge the widely-held view that it is the greater failure propensity of innovative firms that drives litigation risk. Instead, our findings suggest that valuable innovation output makes a firm an attractive litigation target. More broadly, our results provide new evidence to support the view that the current class action litigation system may have adverse effects on the competitiveness of the U.S. economy.




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Kempf, Elisabeth ; Spalt, Oliver Litigating innovation: Evidence from securities class action lawsuits. (2019) 2019 Annual Meeting and Panel Sessions, American Finance Association (Atlanta, GA) [Conference presentation]


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