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The old guard: CEO age and corporate litigation

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  • Malm, James
  • Adhikari, Hari P.
  • Krolikowski, Marcin W.
  • Sah, Nilesh B.

Abstract

Recent studies have indicated that older Chief Executive Officers (CEOs) tend to be more capable, ethical, and risk-averse as compared to their younger counterparts. Keeping this in mind, we use a unique hand-collected data on corporate lawsuits to examine whether CEO age influences corporate litigation. After controlling for several important variables and employing several estimation techniques, we find that firms with older CEOs face fewer lawsuits. The results continue to hold when we decompose lawsuits into securities and non-securities lawsuits. Decomposing the sample firms into high-tech and labor-intensive firms, we find the negative relationship between CEO age and corporate litigation to be more pronounced in labor-intensive firms. Our results are especially relevant in the post-SOX regulation period suggesting that older CEOs enforce regulations and reduce litigation risks for their firms. Overall, our results uncover an important channel through which firms can mitigate corporate litigation, namely older CEOs.

Suggested Citation

  • Malm, James & Adhikari, Hari P. & Krolikowski, Marcin W. & Sah, Nilesh B., 2021. "The old guard: CEO age and corporate litigation," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    • Handle: RePEc:eee:beexfi:v:31:y:2021:i:c:s2214635021000897
    DOI: 10.1016/j.jbef.2021.100545
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    Cited by:

    1. Sah, Nilesh B. & Banerjee, Anandi & Malm, James & More, Deepak G., 2022. "A risky affair: Dual class and FX hedging," Finance Research Letters, Elsevier, vol. 47(PA).
    2. Rachid Achbah, 2024. "Manager Characteristics and SMEs' Restructuring Decisions: In-Court vs. Out-of-Court Restructuring," Papers 2402.18135, arXiv.org.
    3. Rachid Achbah, 2023. "Manager Characteristics and SMEs’ Restructuring Decisions: In-Court vs. Out-of-Court Restructuring," Post-Print hal-04279942, HAL.
    4. Nadia Loukil & Ouidad Yousfi, 2022. "Do CEO’s traits matter in innovation outcomes?," Journal of International Entrepreneurship, Springer, vol. 20(3), pages 375-403, September.
    5. Shengfeng Lu & Hui Tian & Yan Zhao & Yukun Sun, 2025. "Judicial institutional design and corporate litigation: Evidence from a natural experiment in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 33(1), pages 115-138, January.
    6. Feng, Weilin & Meng, Yuqun & Tian, Li Grace & Tu, Steve & Wang, Yuran, 2023. "Corporate strategy and litigation risk," Finance Research Letters, Elsevier, vol. 58(PB).
    7. Malm, James & Soyeh, Kenneth W. & Kanuri, Srinidhi, 2023. "Litigation risk and corporate performance," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).

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