Federal judge ideology and managers' merge decisions
by Wang Juanting
THESIS
2020
M.Phil. Accounting
vii, 37 pages ; 30 cm
Abstract
Using the judge ideology to measure the securities litigation risk level, I examine whether
the securities litigation risk can affect firms’ acquisition decisions. For the firms located in circuits
with more liberal judges, I find firms are less likely to become a bidder. What’s more important,
this effect is more pronounced for firms with more severe agency conflicts and more transparent
information environment. Besides, the post-acquisition performances are also better for the
acquirers exposed to higher litigation risk. Collectively, these pieces of evidence are more
consistent with higher securities litigation risk disciplining managers to make higher-quality M&A
decisions.
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