Litigation risk and financial leverage

Malm, James; Krolikowski, Marcin W.

doi:10.1007/s12197-015-9348-0

Cited by 21 publications

(8 citation statements)

References 23 publications

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“…In that case, not only the board members but also the public pressure may put CEOs in charge. Second, costly litigation may lead firms to change their operating practices, such as holding more cash (Crane, ) or increasing leverage (Malm & Krolikowski, ), which eventually increase firm risk. Third, if litigations lower firm performance, in the long run, CEOs may lose their job due to bad performance.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Employee disputes and CEO turnover: Evidence from labor lawsuits

Unsal

Rayfield

2019

J Corp Accounting Finance

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In this study, we use a unique hand‐collected data set of employee lawsuits to understand the effect of litigation on CEO turnover. We gather 28,258 employee disputes (after initial court hearing) dating between the years 2000 and 2014 to test the relationship between executive turnover following employee allegations. We find increased turnover of CEOs following labor lawsuits. Additional analysis suggests that, following the lawsuits, CEO compensation decreases and becomes more sensitive to cash holding. Our results show that employee lawsuits have an impact on CEO turnover, regardless of the case outcome or motivation. Overall, we document the importance of employee treatment in the workplace. We conclude employee treatment may impact both the tenure and future job prospects of a CEO.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Employee disputes and CEO turnover: Evidence from labor lawsuits

Unsal

Rayfield

2019

J Corp Accounting Finance

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“…Trade-off theory states that increasing risk should be correlated with lower debt levels (Malm & Krolikowski, 2017). As a result, businesses in litigious environments would be motivated to take steps to lower their risk of bankruptcy.…”

Section: The Moderating Role Of Litigation Riskmentioning

confidence: 99%

Climate change performance and financial distress

et al. 2022

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Given the crucial role that environmental accounting plays in sustainable development, this study investigates the relationship between climate change disclosure performance (CCDP) and financial distress as well as the moderating impact of litigation, the existence of a risk committee, the employment of Big4 auditing firms and the level of audit fees. Utilising a sample of the top 300 Australian Securities Exchange (ASX)‐listed non‐financial firms over the period 2008–2019 and ordinary least squares (OLS) regression analysis with fixed effects, it is found that higher levels of CCDP are related to lower levels of financial distress. Additionally, the significant association between CCDP and financial distress is manifested in firms with low litigation risk, firms with a risk committee, firms that employ Big4 auditing firms and firms that incur a higher level of audit fees. Additional tests that mitigate self‐selection and endogeneity, such as propensity score matching (PSM) and the system generalised method of moments (GMM), show that our findings are robust. Finally, our findings shed light on managers' strategic behaviour in relation to the consideration of, and transparency around, climate change risks.

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“…Keputusan mengenai struktur modal membuat manajemen perusahaan sangat berhati-hati. Penelitian terdahulu menunjukkan berbagai macam pemikiran dan perdebatan mengenai strukur modal (Malm & Krolikowski, 2017;Modigliani & Miller, 2013;Mogha & Williams, 2021;Myers, 1984). Dari penelitian terdahulu tersebut tidak ada kajian yang baku mengenai bagaimana perusahaan menentukan struktur modalnya.…”

Section: Pendahuluanunclassified

Peran Ceo Perempuan Dalam Keputusan Struktur Modal Dan Optimasi Nilai Perusahaan

Diantini¹

2022

EJMUNUD

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We extend the literature on how managerial trait relates to corporate financing decisions by documenting that firms run by female CEOs have lower leverage than otherwise similar firms run by male CEOs. We employ a database containing firms listed on Indonesia Stock Exchange from 2008 to 2021. The results are robust in controlling for the variable of firm maturity and corporate governance. We further document that this risk-avoidance behaviour of female CEO appears to lead to distortions in the value maximisation process. However, risk-averted female CEO in a small size company optimise corporate firm value more than in a big size company. These results have important economic implications for long-term corporate growth Keywords: Leverage, Female CEO, capital structure, firm value, firm size

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Litigation risk and financial leverage

Cited by 21 publications

References 23 publications

Employee disputes and CEO turnover: Evidence from labor lawsuits

Employee disputes and CEO turnover: Evidence from labor lawsuits

Climate change performance and financial distress

Peran Ceo Perempuan Dalam Keputusan Struktur Modal Dan Optimasi Nilai Perusahaan

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