Litigation Risk and Cash Holdings

Authors

James Malm, College of CharlestonFollow
Srinidhi Kanuri, University of Southern MississippiFollow

Document Type

Article

Publication Date

10-1-2017

School

Finance

Abstract

© 2016, Springer Science+Business Media New York. We use a unique hand-collected dataset on corporate lawsuits to examine the relationship between litigation risk and cash holdings. We find that an increase in litigation risk is associated with a significant increase in cash holdings. In addition, we document a positive relationship between the level of cash holdings and lawsuits related to the violations of labor, intellectual property, contracts, securities, environmental, product liability, medical liability, and other laws.

Publication Title

Journal of Economics and Finance

Volume

41

Issue

4

First Page

679

Last Page

700

Recommended Citation

Malm, J., Kanuri, S. (2017). Litigation Risk and Cash Holdings. Journal of Economics and Finance, 41(4), 679-700.
Available at: https://aquila.usm.edu/fac_pubs/18415