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We examine the relation between litigation risk and IPO underpricing and test two aspects of the litigation …-risk hypothesis: (1) firms with higher litigation risk underprice their IPOs by a greater amount as a form of insurance (insurance … effect) and (2) higher underpricing lowers expected litigation costs (deterrence effect). To adjust for the endogeneity bias …
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Shareholder litigation risk, measured using the staggered adoption of universal demand (UD) laws in 23 states from 1989 … laws are not passed. To explain the relation between litigation risk and returns, we show that the relation is more …
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Regulators, exchanges, and politicians are considering reining in maker-taker pricing, which is used as a competitive tool by trading venues to acquire order flow. Examining the 2013 reduction in trading fees operated by BATS on its European venues, we document significant effects on market...
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