Journal article
Does Media Coverage Cause Meritorious Shareholder Litigation? Evidence from the Stock Option Backdating Scandal
The Journal of law & economics, Vol.64(3), pp.567-601
08/01/2021
DOI: 10.1086/712832
Abstract
This study examines the role of media coverage in meritorious shareholder litigation. Asserting a causal effect of the media on litigation is normally difficult because of the endogenous nature of media coverage. However, we use the Wall Street Journal's coverage of stock option backdating to overcome these issues. Using a matched sample of firms with similar probabilities of backdating and related government investigations, we find consistent evidence of a causal relation between media coverage and meritorious litigation. We also find a negative abnormal market reaction to the articles and conduct a variety of analyses to show that it was the content of the articles, rather than the coverage itself, that resulted in litigation. Our results demonstrate that the media serves an important role in corporate accountability that both disincentivizes misconduct and holds firms accountable.
Details
- Title: Subtitle
- Does Media Coverage Cause Meritorious Shareholder Litigation? Evidence from the Stock Option Backdating Scandal
- Creators
- Dain C. Donelson - University of IowaAntonis Kartapanis - Texas A&M Univ, College Stn, TX 77843 USAChristopher G. Yust - Texas A&M Univ, College Stn, TX 77843 USA
- Resource Type
- Journal article
- Publication Details
- The Journal of law & economics, Vol.64(3), pp.567-601
- DOI
- 10.1086/712832
- ISSN
- 0022-2186
- eISSN
- 1537-5285
- Publisher
- Univ Chicago Press
- Number of pages
- 35
- Grant note
- Tippie College of Business Red McCombs School of Business Mays Business School
- Language
- English
- Date published
- 08/01/2021
- Academic Unit
- Accounting; Law Faculty
- Record Identifier
- 9984380501102771
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