Mazur, Mieszko, Salganik-Shoshan, Galla, Walker, Thomas and Wang, Jun (2018) Proximity and litigation: Evidence from the geographic location of institutional investors. Journal of Financial Markets . ISSN 13864181 (In Press)
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Official URL: http://dx.doi.org/10.1016/j.finmar.2018.05.002
Abstract
In this paper, we examine how the geographic distance between a firm and its largest institutional investors affects the firm's litigation risk. We show that geographic proximity between the firm and its largest institutional shareholders reduces the incidence of a lawsuit. Moreover, we find that geographic proximity affects the relationship between institutional investors' ownership and the litigation risk of their portfolio firms. These findings indicate that geographically proximate investors may have an informational advantage over investors who are located far away, and that this advantage manifests itself in more effective monitoring of firm management, and consequently, in lower litigation risk.
| Divisions: | Concordia University > John Molson School of Business > Finance |
|---|---|
| Item Type: | Article |
| Refereed: | Yes |
| Authors: | Mazur, Mieszko and Salganik-Shoshan, Galla and Walker, Thomas and Wang, Jun |
| Journal or Publication: | Journal of Financial Markets |
| Date: | 8 May 2018 |
| Digital Object Identifier (DOI): | 10.1016/j.finmar.2018.05.002 |
| Keywords: | Litigation, Institutional investors, Geography, Monitoring, Corporate governance |
| ID Code: | 983948 |
| Deposited By: | Monique Lane |
| Deposited On: | 14 Jun 2018 19:44 |
| Last Modified: | 06 Jun 2020 00:00 |
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