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Lawyers: Gatekeepers of the sovereign debt market?

Author

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  • Bradley, Michael
  • De Lira Salvatierra, Irving
  • Gulati, Mitu

Abstract

The claim that lawyers act as gatekeepers or certifiers in financial transactions is widely discussed in the legal literature. There has, however, been little empirical examination of the claim. We test the hypothesis that law firms have replaced investment banks as the gatekeepers of the market for sovereign debt. Our results suggest that hiring outside law firms sends a negative signal to the market regarding the pending issuance; a finding that is inconsistent with the thesis that outside law firms primarily play a certification role in the sovereign debt market.

Suggested Citation

  • Bradley, Michael & De Lira Salvatierra, Irving & Gulati, Mitu, 2014. "Lawyers: Gatekeepers of the sovereign debt market?," International Review of Law and Economics, Elsevier, vol. 38(S), pages 150-168.
    • Handle: RePEc:eee:irlaec:v:38:y:2014:i:s:p:150-168
    DOI: 10.1016/j.irle.2013.09.001
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    References listed on IDEAS

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    1. Stephanie Collet & Kim Oosterlinck, 2019. "Denouncing Odious Debts," Journal of Business Ethics, Springer, vol. 160(1), pages 205-223, November.
    2. Flores Zendejas, Juan, 2015. "Capital Markets and Sovereign Defaults: A Historical Perspective," Working Papers unige:73325, University of Geneva, Paul Bairoch Institute of Economic History.
    3. Elisabeth de Fontenay & Josefin Meyer & Mitu Gulati, 2019. "The sovereign debt listing puzzle," Oxford Economic Papers, Oxford University Press, vol. 71(2), pages 472-495.

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