Litigation risk and cash holdings

James Malm () and Srinidhi Kanuri ()
Additional contact information
James Malm: College of Charleston
Srinidhi Kanuri: University of Southern Mississippi

Journal of Economics and Finance, 2017, vol. 41, issue 4, No 3, 679-700

Abstract: 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.

Keywords: Litigation risk; Cash holdings (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s12197-016-9373-7

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