The Effects of Political Connections and State Ownership on Corporate Litigation in China

被引:119
作者
Firth, Michael
Rui, Oliver M. [1 ]
Wu, Wenfeng [2 ]
机构
[1] China Europe Int Business Sch, Shanghai, Peoples R China
[2] Shanghai Jiao Tong Univ, Shanghai, Peoples R China
关键词
FINANCIAL DISTRESS; COSTS;
D O I
10.1086/659261
中图分类号
F [经济];
学科分类号
02 ;
摘要
We examine the effects of corporate lawsuits in China and find that litigation announcements depress the stock prices of both defendant and plaintiff firms. Financially distressed defendants suffer lower stock returns. We find that politically connected defendants are favored in the judicial process: they have higher stock returns and are more likely to appeal against adverse outcomes and to obtain a favorable appeal result. State-controlled defendants fare better than privately controlled defendants when it comes to appeals but do not have higher stock returns. The evidence suggests that there is bias in the judicial process.
引用
收藏
页码:573 / 607
页数:35
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