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Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/24436

Title: Testing the Lawyer-induced Litigation Hypothesis in Europe
Authors: Bielen, Samantha
Marneffe, Wim
Issue Date: 2017
Citation: APPLIED ECONOMICS, 50(16), p. 1837-1851
Abstract: Notwithstanding the benefits of competition within the lawyer profession, economic theory supports the existence of a lawyer-induced litigation effect. Given concerns about the growing litigiousness in many European countries and the growing awareness that observed increases in lawyers might further induce litigation rates, policymakers require a thorough understanding of the relationship between the number of lawyers and litigation rates. Utilizing a European crosscountry dataset, we contribute to the scant empirical literature on the lawyer-induced litigation hypothesis. To address endogeneity problems that arise when estimating the effect of the number of lawyers on litigation, we use two strategies. Following existing literature, we first estimate our model by means of the 2SLS procedure. Second, we exploit the instrumental variable approach based on the linear GMM estimator of Arellano and Bond (1991). To date, the Arellano-Bond estimator has not yet been used to address the endogeneity concerns between lawyers and litigation rates despite its advantages and popularity in other research areas. The estimations result in a positive and significant effect of lawyers that is robust across regressions. We discuss the policy implications of our findings.
URI: http://hdl.handle.net/1942/24436
DOI: 10.1080/00036846.2017.1374544
ISSN: 0003-6846
Category: A1
Type: Journal Contribution
Appears in Collections: Research publications

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