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Academic

: Legal Theory Blog

Wittig on the Effects of WTO Disputes on Shareholder Wealth

By Lawrence Solum

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Stephan A. Wittig (University of Hamburg - Institute of Law and Economics) has posted The Shareholder Wealth Implications of WTO Disputes: First Evidence from Anti-Subsidy Panels on SSRN. Here is the abstract:

This event study investigates how capital markets evaluate the effectiveness of the World Trade Organization?s dispute resolution and enforcement mechanism. Event studies have been widely used in the domestic context to measure the impact of litigation on stock prices of involved corporations. This paper expands the existing Law and Finance research from the traditional domestic context to the international WTO level. WTO anti-subsidization cases are examined in this event study because there the link between WTO disputes and private corporations is most evident. First evidence from the single-beneficiary cases suggests that the requests for panel implementation and the circulation of Panel and Appellate Body reports tend to have statistically significant impacts on the beneficiary?s share price. The requests for consultations, formal panel implementations, and the adoption of rulings did not result in significant effects for shareholder wealth which is consistent with findings in the domestic context.

Full post as published by Legal Theory Blog on July 19, 2010 (boomark / email).