CEO social capital and litigation risk

Lu Zhang, Fei Peng, Yuan George Shan and Yiping Chen

Finance Research Letters, 2023, vol. 51, issue C

Abstract: We examine the association between chief executive officer (CEO) social capital and firm litigation risk. Employing a sample of Chinese listed firms from 2008 to 2017, we find that firms with high CEO social capital relate to lower litigation risk. Further analyses show that the negative correlation only exists for firms that are non-state-owned enterprises, are located in low-marketized regions, face periods of economic downturns, have high managerial ownership, and retain well-connected independent directors on boards. Our results hold after a battery of robustness checks. Together, these findings provide unique evidence to support the beneficial role of CEO social capital in risk reduction.

Keywords: CEO social capital; Litigation risk; Network centrality (search for similar items in EconPapers)
JEL-codes: G30 G32 G41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322005827

DOI: 10.1016/j.frl.2022.103405

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