Attracting the Sharks: Corporate Innovation and Securities Class Action Lawsuits

• 成果类型: Article
• 署名作者: Kempf, Elisabeth; Spalt, Oliver
• 署名单位: University of Chicago; Centre for Economic Policy Research - UK; National Bureau of Economic Research; University of Mannheim; European Corporate Governance Institute
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4388
• 发表日期: 2023
• 页码: 1805-1834
• 关键词: CORPORATE GOVERNANCE; Law and economics; INNOVATION; patents; SHAREHOLDER LITIGATION

摘要

This paper provides novel evidence suggesting that securities class action lawsuits, a central pillar of the U.S. litigation and corporate governance system, can constitute an obstacle to valuable corporate innovation. We first establish that valuable innovation output makes firms particularly vulnerable to costly low-quality class action litigation. Exploiting judge turnover in federal courts, we then show that changes in class action litigation risk affect the value and number of patents filed, suggesting firms take into account that risk in their innovation decisions. A new perspective we provide is that innovation success, not only innovation failure, can increase firms' securities class action litigation risk.