Roy Shapira

S.J.D. Candidate

John M. Olin Corporate Governance Fellow

rshapira at sjd.law.harvard.edu

Dissertation

“Corporate Reputation in the Shadow of the Law: How the law affects Non-Legal Incentives”

There is a growing consensus among legal scholars that reputational forces play in important role in shaping corporate behavior. But so far the literature has stayed remarkably silent on how reputational forces work exactly, and how the law affects them. My dissertation narrows this gap. The first part deals with reputational “carrots.” Why do some companies donate to charity more than others? In answering this question I shift the focus from the traditional “buying-goodwill” explanation (companies sacrifice profits because stakeholders are willing to pay more for corporate goodness) to a signaling explanation (companies sacrifice profits as a costly, credible signal to mitigate asymmetric information about the firm’s fundamentals).
The second part of my dissertation deals with reputational “sticks.” Why do some revelations of corporate misconduct result in huge market reactions while others go under the radar? In answering this question I challenge two traditional assumptions in the legal literature. First, I show that reputational sanctions are not a costless, straightforward phenomenon. Because reputational evaluations are inherently noisy, the market systematically under-deters some behaviors and over-deters others. Second, I show that law and reputation are not independent of each other. In particular, I show that litigation serves a “second opinion” role for reputation markets. During litigation (or regulatory investigations) the legal system generates information on the behavior of disputants. This information is available to third parties, and helps them revise their initial reputational evaluations. As a result, the law affects deterrence not just directly through imposing legal sanctions, but also indirectly through providing information that affects non-legal sanctions.

Fields of Research and Supervisors

Comparative Corporate Governance, with Professor Mark Roe, Harvard Law School, Overall Faculty Supervisor
Corporate Finance, with Professor Lucian Bebchuk, Harvard Law School
Laws, Markets and Morals, with Professor Robert Clark, Harvard Law School

Additional Research Interests

Corporate Governance
Corporate Reputation
Corporate Social Responsibility
Law and Social Norms
Economic Analysis of Law

Education

Harvard Law School, S.J.D. Candidate 2009-Present
Harvard Law School, LL.M. Program (focus: Corporate Governance Concentration), 2008-2009
IDC, Israel, LL.M. (focus: European Business Law), 2005-2006
IDC, Israel, BA. (focus: Finance), 2001-2005
IDC, Israel, LL.B., 2001-2005

Academic Appointments and Fellowships

Harvard College, Adjunct Lecturer (Economics Dept.), "Laws, Markets and Morals" tutorial seminar, 2009-Present
Harvard Law School Clark Byse Fellow, Lecturer, "Laws, Markets and Morals" workshop, 2012-2013
Harvard Law School Graduate Program Fellow, TA, "Legal Research, Writing and Analysis" course, 2010-2014
Harvard Law School Graduate Program Fellow, TA, Writing Workshop, 2010-2012
Harvard Law School Graduate Program Fellow, LL.M. Advisor, 2009-2010, 2013-2014

Representative Publications

Reputational Sanctions in the Shadow of the Law, Working Paper (2013)
Make it Look like a Struggle: How Corporate Law Affects Reputation, Working Paper (2013)
Corporate Philanthropy as Signaling and Co-optation, 80 Fordham Law Review 1889 (2012).
Justice and Efficiency in Civil Procedure: A Novel Interpretive Approach, 7 IDC Law Review 75 (2007) (in Hebrew) (with Alon Klement)

Last Updated: August 20, 2013