Does Media Coverage Cause Meritorious Shareholder Litigation? Evidence from the Stock Option Backdating Scandal
Antonis Kartapanis and
Christopher G. Yust
Journal of Law and Economics, 2021, vol. 64, issue 3, 567 - 601
This study examines the role of media coverage in meritorious shareholder litigation. Asserting a causal effect of the media on litigation is normally difficult because of the endogenous nature of media coverage. However, we use the Wall Street Journal’s coverage of stock option backdating to overcome these issues. Using a matched sample of firms with similar probabilities of backdating and related government investigations, we find consistent evidence of a causal relation between media coverage and meritorious litigation. We also find a negative abnormal market reaction to the articles and conduct a variety of analyses to show that it was the content of the articles, rather than the coverage itself, that resulted in litigation. Our results demonstrate that the media serves an important role in corporate accountability that both disincentivizes misconduct and holds firms accountable.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to the online full text or PDF requires a subscription.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/712832
Access Statistics for this article
More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().