CEO social capital and litigation risk

Lu Zhang, Fei Peng, Yuan George Shan, Yiping Chen

Research output: Contribution to journalArticlepeer-review

Abstract

We examine the association between chief executive officer (CEO) social capital and firm litigation risk. Employing a sample of Chinese listed firms from 2008 to 2017, we find that firms with high CEO social capital relate to lower litigation risk. Further analyses show that the negative correlation only exists for firms that are non-state-owned enterprises, are located in low-marketized regions, face periods of economic downturns, have high managerial ownership, and retain well-connected independent directors on boards. Our results hold after a battery of robustness checks. Together, these findings provide unique evidence to support the beneficial role of CEO social capital in risk reduction.
Original languageEnglish
Article number103405
JournalFinance Research Letters
Volume51
DOIs
Publication statusPublished - 2023

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