عنوان انگلیسی مقاله:
Litigation and corporate risk taking: Evidence from Chinese listed firms
ترجمه فارسی عنوان مقاله:
دادخواست و ریسک پذیری شرکت ها: شواهدی از شرکت های لیست شده در چین
Sciencedirect - Elsevier - International Review of Law & Economics, 61 (2020) 105879: doi:10:1016/j:irle:2019:105879
Corporate risk-taking plays a crucial role in their development and in overall economic growth. With
the increase in market uncertainty and the advancement of the legalization process, the probability
of companies being involved in lawsuits has continued to increase. How does a company’s litigation
experience affect its risk-taking? Is it “once bitten, twice shy” or will it be “take a nap, grow up with
wisdom?” Furthermore, what strategies can be implemented by a company to enhance its risk-taking?
Using the difference-in-differences method, this study adopts the data of listed companies from 2000
to 2015 to examine the impact of litigation on corporate risk-taking and its internal mechanism. Two
main findings are obtained. First, the indicted experience significantly improves a company’s risk-taking.
Second, this “learning effect” is embodied as “nonproductive activities,” and the accused enterprises
can realize property right protection and risk-taking by reducing R&D investment and increasing rentseeking investment. These findings are proven to be valid after a series of robust tests. The orientation of
entrepreneurship is highly dependent on the institutional environment where a company is located. In
the transitional period, truly enhancing the risk-taking of enterprises and giving play to the “productive
function” of the entrepreneurial spirit are needed to continuously strengthen the system construction of
a company’s operating environment and create a fair and just legal environment.
Keywords: Litigation | Risk-taking | Deterrent effect | Learning effect | Entrepreneurship