Litigation risk and financial leverage

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• 作者：James Malm ; Marcin Krolikowski
• 关键词：Litigation risk ; Financial leverage ; Debt maturity
• 刊名：Journal of Economics and Finance
• 出版年：2017
• 出版时间：January 2017
• 年：2017
• 卷：41
• 期：1
• 页码：180-194
• 全文大小：
• 刊物主题：Economics, general; Macroeconomics/Monetary Economics//Financial Economics; Finance, general;
• 出版者：Springer US
• ISSN：1938-9744
• 卷排序：41

文摘

In this paper, we use a unique hand-collected dataset on corporate litigation to examine the relationship between litigation risk and financial leverage. We find that an increase in litigation risk is associated with a significant decrease in total debt. Partitioning total debt into long-term debt and short-term debt, we find a negative relationship between litigation risk and long-term debt. There is no significant relationship between litigation risk and short-term debt.