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Can accolades make stakeholders tolerant: Award-winning and corporate litigation risk

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Listed:
  • Xu, Shun
  • Fan, Xingyu
  • Wen, Shouxun

Abstract

Based on a sample of Chinese listed companies from 2007 to 2022, this paper examines whether corporate accolades are associated with a lower incidence of litigation. By holding earnings and other determinants of litigation, we find that obtaining and disclosing awards can reduce information asymmetry and improve corporate reputation, thereby reducing the litigation risk of firms. Our results still hold after a series of robustness tests. Further analysis finds that the mitigation effect of awards is more pronounced in operation disputes and debt disputes.

Suggested Citation

  • Xu, Shun & Fan, Xingyu & Wen, Shouxun, 2024. "Can accolades make stakeholders tolerant: Award-winning and corporate litigation risk," Finance Research Letters, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009553
    DOI: 10.1016/j.frl.2024.105925
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    References listed on IDEAS

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    More about this item

    Keywords

    Litigation risk; Corporate award; Accolades; Stakeholders;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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