Litigation Risk and Debt Contracting: Evidence from a Natural Experiment

2020 ◽  
Vol 63 (4) ◽  
pp. 595-630
Author(s):  
Zhihong Chen ◽  
Ningzhong Li ◽  
Jianghua Shen
Keyword(s):  
Natural Experiment ◽  
Litigation Risk ◽  
Debt Contracting

SOX Section 404 and Corporate Innovation

2018 ◽  
Vol 54 (2) ◽  
pp. 759-787 ◽  
Author(s):  
Huasheng Gao ◽  
Jin Zhang
Keyword(s):  
Natural Experiment ◽  
Litigation Risk ◽  
Patent Citations ◽  
Section 404 ◽  
Corporate Innovation ◽  
Sarbanes Oxley ◽  
Real Costs ◽  
Corporate Innovativeness

This paper exploits a quasi-natural experiment to investigate the relation between the Sarbanes–Oxley Act (SOX) of 2002 and corporate innovation: firms with a public float under $75 million can delay compliance with Section 404 of the act. We find a significant decrease in the number of patents and patent citations for firms that are subject to Section 404 compliance relative to firms that are not. This relation is more pronounced when firms are financially constrained and when firms face high litigation risk. Overall, our evidence suggests that SOX imparts real costs to the economy by decreasing corporate innovativeness.

What Happens If Private Accounting Information Becomes Public? Small Firms’ Access to Bank Debt

2019 ◽  
Vol 44 (6) ◽  
pp. 1091-1111 ◽  
Author(s):  
Snježana Deno ◽  
Thomas Loy ◽  
Carsten Homburg
Keyword(s):  
Small Firms ◽  
Natural Experiment ◽  
Accounting Information ◽  
Public Information ◽  
Financial Statements ◽  
Regulatory Change ◽  
Bank Debt ◽  
Debt Contracting ◽  
Private And Public ◽  
Proprietary Cost

We examine the effect of private accounting information becoming public on small firms’ access to bank debt. Both proprietary cost of disclosure and relationship banking have contributed to German private firms’ traditional non-disclosure of financial statements. We employ a regulatory change, which increased enforcement and established severe fines for firms that do not publicly disclose financial statements, as a quasi-natural experiment. We find that small firms’ access to bank debt has significantly increased after the disclosure shock. With our study based on a novel dataset in a non-voluntary private firm setting, we contribute to the discussion on private and public information in debt contracting.

The Effect of Managerial Litigation Risk on Earnings Warnings: Evidence from a Natural Experiment

2020 ◽  
Vol 58 (5) ◽  
pp. 1161-1202
Author(s):  
YING HUANG ◽  
NINGZHONG LI ◽  
YONG YU ◽  
XIAOLU ZHOU
Keyword(s):  
Natural Experiment ◽  
Litigation Risk ◽  
Earnings Warnings

Getting the Measure of Twins

2018 ◽  
Author(s):  
William Viney
Keyword(s):  
Environmental Effects ◽  
Natural Experiment ◽  
Human Genetics ◽  
Scientific Research ◽  
Identical Twin ◽  
Social Scientists ◽  
Modern Biology ◽  
Stephen Jay Gould

Stephen Jay Gould, the biologist and author, once joked that were he an identical twin raised separately from his brother they could ‘hire ourselves out to a host of social scientists and practically name our fee’. In order to monetise Gould’s fantasy, one would want a form of twinship that could operate according to evidential, experimental, somatic and circumstantial ideals. And Gould admits that he and his brother would need to be viewed as ‘the only really adequate natural experiment for separating genetic from environmental effects in humans’. This chapter seeks to interrogate the evidential and experimental circumstances that may underpin the comic quips that guide modern biology. In human genetics, twins are used as experimental bodies that are made to matter in particular ways and for particular people; they become newly ‘animate’ for being enrolled into scientific research. Raised in cultures assumed to be alike or dissimilar, isolated by researchers for being valuable in the measured disentanglement of assembled molecular agents (which are sometimes distinguished from an assemblage referred to as an ‘environment’), twins achieve a status of experimental significance not just for what they do but also for what they are taken to be.

Sign in / Sign up

Export Citation Format

Share Document