题目：Federal Judge Ideology: A New Measure of Ex-Ante Litigation Risk
演讲者：Allen Huang
Assistant Professor
Hong Kong University of Science and Technology
时间：2016年11月11日（周五）上午 10：00 - 11:30
地点：嘉庚一207
主持人：郑祯 助理教授
参 加 者：对会计、财务研究有兴趣的师生
简介：Following the political theory of judicial decision-making, our paper proposes a parsimonious ex-ante litigation risk measure: federal court judge ideology. We find that judge ideology complements existing measures of litigation risks based on industry membership and firm characteristics, and provides incremental explanatory power in predicting litigation occurrence and outcomes. Firms in more liberal circuits are more likely to be sued. This effect is stronger for firms with more sophisticated leading plaintiffs and higher expected litigation payoffs, as well as for lawsuits without specific allegations. Next, we show that lawsuits filed in more liberal circuits are less likely to be dismissed and result in higher settlement amounts. Using judge departures as exogenous shocks to court ideology, we find that liberal changes increase the likelihood of lawsuit filings and that the market reacts negatively to the departures. Finally, using the new measure, we document that litigation risk deters managers from providing long-term earnings guidance, which existing measures cannot explain.
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