The effect of securities litigation risk on firm value and disclosure

IF 3.2 3区 管理学 Q1 BUSINESS, FINANCE
Dain C. Donelson, Christian M. Hutzler, Brian R. Monsen, Christopher G. Yust
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Abstract

Critics assert that securities class actions are economically burdensome and yield minimal recoveries, whereas proponents claim they deter wrongdoing. We examine key events in the recent Goldman Sachs Supreme Court case to test the net effect of securities litigation risk on shareholder value. We find that investors view securities class actions as value-increasing. However, the strength of this effect varies based on external monitoring. Investors view securities class actions as more value-enhancing when institutional ownership is low. We also use this setting to examine the effect of securities litigation risk on mandatory disclosure because the Goldman Sachs case focuses on mandatory disclosure properties. Using a difference-in-differences design, we find firm risk factor disclosures become shorter and less similar to industry peers, and they contain more uncertain and weak terms. Overall, our results show nuanced effects of securities litigation risk on shareholder value and firm disclosure.

Abstract Image

证券诉讼风险对公司价值和信息披露的影响
批评者认为,证券集体诉讼是一种经济负担,且追偿率极低,而支持者则认为,证券集体诉讼能遏制不法行为。我们研究了最近高盛最高法院案件中的关键事件,以检验证券诉讼风险对股东价值的净影响。我们发现,投资者认为证券集体诉讼会增加价值。但是,这种影响的强度因外部监督而异。当机构所有权较低时,投资者认为证券集体诉讼更能提升价值。由于高盛案关注的是强制披露属性,因此我们也利用这一背景来研究证券诉讼风险对强制披露的影响。利用差异设计,我们发现公司的风险因素披露变得更短,与行业同行的相似度更低,并且包含更多不确定和弱化的条款。总体而言,我们的研究结果显示了证券诉讼风险对股东价值和公司信息披露的细微影响。
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来源期刊
CiteScore
6.20
自引率
11.10%
发文量
97
期刊介绍: Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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