The need to validate exogenous shocks: Shareholder derivative litigation, universal demand laws and firm behavior

• 成果类型: Article
• 署名作者: Donelson, Dain C.; Kettell, Laura; McInnis, John; Toynbee, Sara
• 署名单位: University of Iowa; University of Texas System; University of Texas Austin
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2021.101427
• 发表日期: 2022
• 关键词: disclosure evidence; RIGHTS; BOARD; cost

摘要

Several recent studies argue that the adoption of universal demand (UD) laws represent an exogenous decline in litigation risk by increasing the procedural hurdles associated with shareholder derivative litigation. This study examines how UD laws affect the incidence of derivative litigation risk and related decisions. We show that the adoption of UD laws had no meaningful impact on derivative litigation from 1996 to 2015. We also find no evidence that UD laws affect aggressive accounting, voluntary disclosure, executive compensation, or corporate governance decisions. Collectively, our findings cast doubt on the validity of using UD laws as an exogenous shock to litigation risk. 0 2021 Elsevier B.V. All rights reserved.