Does Shareholder Litigation Affect the Corporate Information Environment?
Le, N.; Nguyen, D.D.; Sila, V.
Professor Louis Nguyen email@example.com
This paper examines whether shareholder litigation contributes to the decline in the number of U.S. stock market listings. We find that higher litigation risk induces firms to delist. We establish causality using two exogenous shocks to ex-ante litigation risk, including federal judge ideology and an influential judicial precedent. We find that the effect is at least partially driven by indirect costs of litigation and that being private can significantly reduce the threat of litigation. The results suggest that mitigating excessive litigation costs for public firms is crucial to ensure the continued vibrancy of the U.S. stock market.
Le, N., Nguyen, D., & Sila, V. (2021). Does Shareholder Litigation Affect the Corporate Information Environment?. Journal of Financial Markets, 56, Article 10060. https://doi.org/10.1016/j.finmar.2020.100600
|Journal Article Type||Article|
|Acceptance Date||Aug 22, 2020|
|Online Publication Date||Nov 6, 2021|
|Deposit Date||Sep 9, 2021|
|Publicly Available Date||May 6, 2023|
|Journal||Journal of Financial Markets|
|Peer Reviewed||Peer Reviewed|
Accepted Journal Article
Publisher Licence URL
© 2021 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
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