Tuesday, October 8, 2019 - 4:10pm to 5:45pm
Location: 
Room 219, Flavelle Building, 78 Queen's Park

LAW & ECONOMICS COLLOQUIUM 

Elisabeth Kempf
University of Chicago
Booth School of Business

Litigating Innovation:
Evidence from Securities Class Action Lawsuits 

Tuesday, October 8, 2019
4:10 - 5:45
Room FL219 (John Willis Classroom)
78 Queen's Park 

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.

Elisabeth Kempf joined Chicago Booth in 2016 as an Assistant Professor of Finance. Her primary research interest is in empirical corporate finance. Her research has explored issues related to corporate governance and sources of skill for financial analysts and fund managers. Her dissertation has been awarded the AQR Top Finance Graduate Award, the WFA Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research, the Young Scholars Finance Consortium Best Ph.D. Paper Award, and the EFA Best Doctoral Tutorial Paper Prize. Her work has been published in the Review of Financial Studies and is forthcoming in the Journal of Financial Economics. 

Kempf holds a Ph.D. in finance from Tilburg University (Netherlands), an M.Sc. in finance from HEC Paris (France), and a B.Sc. in business administration from the University of Mannheim (Germany). Prior to her Ph.D. studies, she worked as an analyst at Deutsche Bank. 

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