We examine the effect of shareholder litigation rights on managers' acquisition decisions. Our experimental design exploits a U.S. Ninth Circuit Court of Appeals ruling on July 2, 1999 that resulted in a reduction in shareholder class actions. We find that, since the ruling, firms in Ninth...

Using the staggered adoption of universal demand (UD) laws in the United States, we show that the reduction in shareholder litigation risk deteriorates firms' stock price informativeness. This reduction in stock price informativeness is due to firms changing the way they invest rather than...

A statutory derivative action has been proposed for the United Kingdom and is contained in Part 11 of the Company Law Reform Bill. Australia has had a statutory derivative action for approximately 6 years. This paper outlines the results of the first empirical study of the Australian statutory...