Absence of Controlling Shareholders and Litigation Risk: Evidence from China. Issue 4 (16th March 2022)

• Record Type: Journal Article
• Authors: Zhang, Honghui; Zou, Ying; Zhang, Linyi; Xiong, Haojun; Xie, Ziqin
• Is Part Of: Emerging markets finance & trade. Volume 58:Issue 4(2022)
• Page Start: 1176
• Page End: 1190
• Publication Date: 2022-03-16
• Subjects: Controlling shareholders -- litigation risk -- agency problem -- China; M41 -- G30; Balkan Peninsula -- Commerce -- Periodicals; Balkan Peninsula -- Foreign economic relations -- Periodicals; Europe, Central -- Commerce -- Periodicals; Europe, Central -- Foreign economic relations -- Periodicals; Europe, Eastern -- Commerce -- Periodicals; Europe, Eastern -- Foreign economic relations -- Periodicals; Turkey -- Commerce -- Periodicals; Turkey -- Foreign economic relations -- Periodicals; Asia -- Commerce -- Periodicals; Asia -- Foreign economic relations -- Periodicals; Eurasia -- Commerce -- Periodicals; Eurasia -- Foreign economic relations -- Periodicals; 382.05
• DOI: 10.1080/1540496X.2021.1973422
• Languages: English
• ISSNs: 1540-496X

Abstract

ABSTRACT: Using 2003–2018 data from China, this study analyzes the effect of absence of controlling shareholders on litigation risk. The results show that companies without controlling owners face higher litigation risk, an association that exists mainly in respondent companies. Upon further analysis, we find that this negative effect is more pronounced when the ownership is highly dispersed, and less pronounced for companies with greater analyst followings. This study enriches litigation risk literature from the perspective of absence of controlling shareholders, and enlightens other related studies that focus on emerging economies.