Document Type

Article

Language

eng

Publication Date

12-2018

Publisher

Elsevier

Source Publication

International Review of Law and Economics

Source ISSN

0144-8188

Abstract

We analyze a unique hand-collected international sample of 475 corporate lawsuits involving 361 publicly-traded defendant firms headquartered in 16 developed countries to explore how country factors influence litigation risk, equity market value, lawsuit outcomes, and settlement costs. Unlike U.S.-focused studies, we do not find a significant relation between stock turnover, equity performance, and the probability of litigation. Defendant firms headquartered in civil law countries or countries with less efficient judiciary systems face lower litigation risk and costs as well as less share price decline at filing. Countries whose courts are less independent demonstrate a significant bias against foreign defendant firms.

Comments

Accepted version. International Review of Law and Economics, Vol. 56 (December 2018): 28-41. DOI. © 2018 Elsevier. Used with permission.

Available for download on Tuesday, December 01, 2020

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