Line of Inquiry: Elisabeth Kempf on the costs of meritless lawsuits

Oct 11, 2018

Sections Finance Video

How big a problem is meritless litigation for US companies? It depends on how innovative they are. Research by Chicago Booth's Elisabeth Kempf and Oliver G. Spalt of Tilburg University suggests innovative companies are more likely to face meritless class-action suits and suffer more as a result of them than their less-innovative counterparts. Kempf explains what drives this "tax on successful innovation," and what policy makers could do to fix it.