Shareholder litigation rights and corporate cash holdings: Evidence from universal demand laws

Volume: 52, Pages: 192 - 213
Published: Oct 1, 2018
Abstract
We exploit the staggered adoption of universal demand (UD) laws, which hinders shareholders’ rights to initiate derivative lawsuits, by 23 states in the United States from 1989-2005 as a quasi-natural experiment to examine the effects of shareholder litigation as a corporate governance mechanism on corporate cash holdings and its implication for shareholder value. We find that reduced derivative lawsuit risk following the passage of UD laws...
Paper Details
Title
Shareholder litigation rights and corporate cash holdings: Evidence from universal demand laws
Published Date
Oct 1, 2018
Volume
52
Pages
192 - 213
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