Red Scare? A Study of Ethnic Prejudice in the Prosecutions under the Economic Espionage Act / Hanming Fang, Ming Li.

Format:

Book

Author/Creator:

Fang, Hanming.

Contributor:

National Bureau of Economic Research.

Li, Ming.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29272.

NBER working paper series no. w29272

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

We empirically test whether the Department of Justice (DOJ) engages in ethnic prejudice against Chinese in its prosecutorial decisions under the Economic Espionage Act (EEA) of 1996. Using data of EEA cases from November 1996 to June 2021, we conduct Becker's outcome test for evidence of ethnic prejudice. We find that Chinese-named defendants were more likely to be dismissed by trial or acquitted by jury, and were found guilty on fewer counts, and on average received harsher indictments. These results are robust regardless of whether we consider all cases or only arguably ``marginal'' cases. We also find that, for those publicly listed victim firms whose trade secrets were allegedly stolen by the charged defendants, the stock market reaction was much more muted to the news on the case filing date if the charged defendants are of Chinese descent. Our study provides the first systematic evidence that the DOJ's prosecutorial decisions in the application of the EEA may have been tainted by ethnic prejudice against Chinese, including American citizens of Chinese descent.

Notes:

Print version record

September 2021.