Download or read book The Effects of Product Liability Litigation on the Value of Firms written by David Prince and published by . This book was released on 2000 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use event study methodology to examine the effects of product liability litigation on firms in the automobile and pharmaceutical industries. Others have examined verdicts and found no effect. We find that the filing of lawsuits leads to significant losses in firm value. These losses are approximately equal to the upper bound of the direct loss in value of the firms involved; there appears to be relatively little loss in reputation from product liability events. We find that in the automobile industry, competitors lose when one firm is sued, but in the pharmaceutical industry, a lawsuit against one firm leads to an increase in value of other firms.