Can ‘delitigation’ transform an industry?
The Quarterly Review of Economics and Finance, 2018, vol. 67, issue C, 245-254
I investigate whether removing product liability – “delitigation” – affects a firm’s market value. This research sheds light on the influence of litigation risk on firm value. Using the vaccine industry as an example, I find the average market return to the licensing of a new vaccine increases after the passage of legislation that removed most product liability for vaccines. While average market return to the licensing of any new drug that a vaccine maker produced also increases, returns to drug firms that do not make vaccines remain the same after the legislation. Company risk-taking enhances market reaction to the announcement of a new vaccine. Delitigation appears to contribute to the transformation of vaccine makers.
Keywords: Product liability; Regulated industries; National Childhood Vaccine Injury Act (search for similar items in EconPapers)
JEL-codes: K3 L2 L5 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:67:y:2018:i:c:p:245-254
Access Statistics for this article
The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty
More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().