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Journal of Economics and Finance

Erschienen in:

15.09.2016

Litigation risk and cash holdings

verfasst von: James Malm, Srinidhi Kanuri

Erschienen in: Journal of Economics and Finance | Ausgabe 4/2017

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Abstract

We use a unique hand-collected dataset on corporate lawsuits to examine the relationship between litigation risk and cash holdings. We find that an increase in litigation risk is associated with a significant increase in cash holdings. In addition, we document a positive relationship between the level of cash holdings and lawsuits related to the violations of labor, intellectual property, contracts, securities, environmental, product liability, medical liability, and other laws.

Vorheriger Artikel Security issuance decisions, idiosyncratic risk, and macroeconomic dynamics

Nächster Artikel Liquidity, overpricing, and the tactics of informed traders

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Tobit model is a censored regression methodology. This technique is designed to estimate linear relationships between variables when there is either left- or right-censoring in the dependent variable. The results continue to hold under this methodology.

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Titel: Litigation risk and cash holdings
verfasst von: James Malm
Srinidhi Kanuri
Publikationsdatum: 15.09.2016
Verlag: Springer US
Erschienen in: Journal of Economics and Finance / Ausgabe 4/2017
Print ISSN: 1055-0925
Elektronische ISSN: 1938-9744
DOI: https://doi.org/10.1007/s12197-016-9373-7

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