Can accolades make stakeholders tolerant: Award-winning and corporate litigation risk

Shun Xu, Xingyu Fan and Shouxun Wen

Finance Research Letters, 2024, vol. 67, issue PB

Abstract: Based on a sample of Chinese listed companies from 2007 to 2022, this paper examines whether corporate accolades are associated with a lower incidence of litigation. By holding earnings and other determinants of litigation, we find that obtaining and disclosing awards can reduce information asymmetry and improve corporate reputation, thereby reducing the litigation risk of firms. Our results still hold after a series of robustness tests. Further analysis finds that the mitigation effect of awards is more pronounced in operation disputes and debt disputes.

Keywords: Litigation risk; Corporate award; Accolades; Stakeholders (search for similar items in EconPapers)
JEL-codes: D81 M21 M37 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009553

DOI: 10.1016/j.frl.2024.105925

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