The Effect of Litigation Risk on Firm Investment: Evidence from a Natural Experiment

2021 ◽  
Author(s):  
Xiaoyong Fu
Keyword(s):  
Natural Experiment ◽  
Litigation Risk ◽  
Firm Investment

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.

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

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
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