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Do shareholder litigations have spillover effects on peer companies from the perspective of financing constraints?

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  • Wang, Zichen
  • Zhang, Chang

Abstract

This paper analyzes whether shareholder litigation has spillover effects on peer non-litigated companies from the perspective of financing constraints. The study found that shareholder litigation aggravated the degree of financing constraints of non-litigated listed companies in the same industry, showing significant spillover effects. After multiple robustness tests, this conclusion remains unchanged. The mechanism test found that shareholder litigation mainly affects financing constraints by inhibiting equity financing and bank loans of non-litigated listed companies in the same industry. Finally, the further analysis found that the spillover effect can be effectively weakened through spatial distance and cross-ownership.

Suggested Citation

  • Wang, Zichen & Zhang, Chang, 2023. "Do shareholder litigations have spillover effects on peer companies from the perspective of financing constraints?," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007730
    DOI: 10.1016/j.frl.2023.104401
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