Risk Sharing within and Outside the Firm: The Disparate Effects of Wrongful Discharge Laws on Expected Stock Returns

Mahlstedt, Robert; Weber, Rüdiger

doi:10.2139/ssrn.3747460

Cited by 2 publications

(1 citation statement)

References 22 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…(2011) show that a strong rule of law reduces the risks associated with innovation. On the other hand, many studies show that strong rule of law favors risk sharing (e.g., Vassallo & Gallego, 2005; Fafchamps, 2011; Mahlstedt & Weber, 2020, etc.). For example, the law provides instruments for risk sharing, especially for small shareholders vis‐à‐vis large shareholders (Lubna, 2011).…”

Section: Introductionmentioning

confidence: 99%

Public expenditure, risk sharing and economic growth

Zhang

2023

The Manchester School

View full text Add to dashboard Cite

We develop an endogenous growth model with expanding variety in which asymmetric information frictions arise when R&D ﬁrms need access to external funding to ﬁnance their R&D investments and public expenditure aﬀects the magnitude of hidden costs, in turn affecting the severity of asymmetric information frictions. We show that public expenditure affects growth by influencing risk sharing, thereby identifying a new channel, unlike the standard mechanism used in the literature that emphasizes the role of public expenditure in directly improving the productivity of the private sector.

show abstract

Section: Introductionmentioning

confidence: 99%

Public expenditure, risk sharing and economic growth

Zhang

2023

The Manchester School

View full text Add to dashboard Cite

show abstract

Shareholder litigation risk and stock returns

Luo

2024

The Financial Review

View full text Add to dashboard Cite

Examining the staggered adoption of universal demand (UD) laws as an exogenous shock to shareholder litigation risk, we show that firms have lower stock returns following that adoption in a difference‐in‐differences (DID) design and Fama and MacBeth (1973) regression. Sorting stocks into UD laws portfolios, we show that firms adopting UD laws earn lower risk‐adjusted returns than those who do not. Further, the relation between UD laws and returns is more pronounced when firms face financial constraints, CEOs engage in high risk taking, or takeover protection is low.

show abstract

Risk Sharing within and Outside the Firm: The Disparate Effects of Wrongful Discharge Laws on Expected Stock Returns

Cited by 2 publications

References 22 publications

Public expenditure, risk sharing and economic growth

Public expenditure, risk sharing and economic growth

Shareholder litigation risk and stock returns

Contact Info

Product

Resources

About