Journal article
Does disclosure deter or trigger litigation?
Journal of accounting & economics, v 39(3), pp 487-507
01 Sep 2005
Abstract
Securities litigation poses large costs to firms. The risk of litigation is heightened when firms have unexpectedly large earnings disappointments. Previous literature presents mixed evidence on whether voluntary disclosure of the bad news prior to scheduled earnings announcements deters or triggers litigation. We show that the counterintuitive finding in prior literature that disclosure triggers litigation could be driven by the endogeneity between disclosure and litigation. Using a simultaneous equations methodology, we find no evidence that disclosure triggers litigation. In fact, consistent with economic arguments, our evidence suggests that disclosure potentially deters certain types of litigation.
Metrics
Details
- Title
- Does disclosure deter or trigger litigation?
- Creators
- Laura Field - Pennsylvania State UniversityMichelle Lowry - Pennsylvania State UniversitySusan Shu - Boston College
- Publication Details
- Journal of accounting & economics, v 39(3), pp 487-507
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000232042100004
- Scopus ID
- 2-s2.0-23944453082
- Other Identifier
- 991021881498604721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics