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Enterprise litigation risk and risk taking

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  • Guo, Heng

Abstract

As a significant uncertainty in business operations, litigation risk negatively impacts corporate reputation and increases corporates' risk-taking. This paper explores the impact of litigation risk on corporate risk-taking. The study finds that: the more significant the amount of litigation involved and the higher the litigation risk, the greater the corporate risk-taking; the higher the analyst concern, the smaller the role of corporate litigation risk in enhancing corporate risk-taking; and the mediation test finds that firms with higher litigation risk can increase corporate financing constraints and negatively affect corporate risk-taking.

Suggested Citation

  • Guo, Heng, 2023. "Enterprise litigation risk and risk taking," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323003975
    DOI: 10.1016/j.frl.2023.104025
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    References listed on IDEAS

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    Cited by:

    1. Ji, Tuo & Cai, Dong, 2024. "Major shareholder equity pledge and litigation risk," Finance Research Letters, Elsevier, vol. 65(C).
    2. Qu, Shawn, 2024. "Litigation risk and corporate philanthropy: A managerial perspective analysis," Finance Research Letters, Elsevier, vol. 62(PA).

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