To Sue or Not to Sue? : Foreign-Sounding CEO Name and Classactionlawsuits
In this paper, we investigate if the perceived name-based ethnicity of CEOs has any relationship with the likelihood of shareholder class-action lawsuits. Using machine learning algorithms on CEO names, we develop an objective proxy of name-based ethnicity and find that, firms managed by ‘foreign-sounding’ CEOs exhibit a lower likelihood of class-action lawsuits. Our results are robust to matched sample analysis, Heckman two-stage selection, alternate model specifications as well as use of an alternate proxy. We further find that succession of a foreignsounding CEO by a non-foreign-sounding CEO increases the likelihood of class-actionlawsuits. Our paper has important implications for firms, especially in high litigation industries or high litigation situations
Year of publication: |
2022
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Authors: | Kale, Arati ; Kale, Devendra ; Ganji, Gajanan |
Publisher: |
[S.l.] : SSRN |
Saved in:
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