Study on the Influence of Litigation Risk on Chinese Listed Companies
- 10.2991/aebmr.k.200908.055How to use a DOI?
- law and finance, litigation risk, enterprise innovation, China’s listed companies, adverse selection
In recent years, the number of lawsuits filed by Chinese listed companies has been on the rise. So does the scale of the amount involved. When a public company is involved in litigation, the potential uncertainty increases dramatically, threatening investment projects including innovation. This paper discusses the evolution of litigation risk, the factors affecting litigation risk and the impact of litigation risk on enterprise innovation. Results show that once the company is involved in lawsuit, it will face huge labor costs, litigation costs, as well as the compensation resulting from loss of the lawsuit, which seriously undermines its financial situation. Once cash flows tighten, management will cut non-rigid investment projects, such as research and development activities, to bring risks under control.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Ci Zhang PY - 2020 DA - 2020/09/08 TI - Study on the Influence of Litigation Risk on Chinese Listed Companies BT - Proceedings of the 3rd International Conference on Economy, Management and Entrepreneurship (ICOEME 2020) PB - Atlantis Press SP - 336 EP - 340 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200908.055 DO - 10.2991/aebmr.k.200908.055 ID - Zhang2020 ER -