article

Political Values, Culture, and Corporate Litigation

Authors:

Alok KumarAuthors Info & Claims

Management Science, Volume 61, Issue 12

Pages 2905 - 2925

https://doi.org/10.1287/mnsc.2014.2106

Published: 01 December 2015 Publication History

Abstract

Using one of the largest samples of litigation data available to date, we examine whether the political culture of a firm determines its propensity for corporate misconduct. We measure political culture using the political contributions of top managers, firm political action committees, and local residents. We show that firms with a Republican culture are more likely to be the subject of civil rights, labor, and environmental litigation than are Democratic firms, consistent with the Democratic ideology that emphasizes equal rights, labor rights, and environmental protection. However, firms with a Democratic culture are more likely to be the subject of litigation related to securities fraud and intellectual property rights violations than are Republican firms, whose party ideology stresses self-reliance, property rights, market discipline, and limited government regulation. Upon litigation filing, both types of firms experience similar announcement reaction, which suggests that the observed relationship between political culture and corporate misconduct is unlikely to reflect differences in expected litigation costs.

Data, as supplemental material, are available at <ext-link ext-link-type="uri" href="http://dx.doi.org/10.1287/mnsc.2014.2106">http://dx.doi.org/10.1287/mnsc.2014.2106</ext-link>.

This paper was accepted by Brad Barber, finance.

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Political Values, Culture, and Corporate Litigation
1. Applied computing
  1. Enterprise computing
  2. Law, social and behavioral sciences
    1. Law
2. Social and professional topics
  1. Computing / technology policy
  2. Professional topics

Index terms have been assigned to the content through auto-classification.

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cover image Management Science

Management Science Volume 61, Issue 12

December 2015

277 pages

ISSN:0025-1909

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Publisher

INFORMS

Linthicum, MD, United States

Publication History

Published: 01 December 2015

Accepted: 26 August 2014

Received: 29 November 2012

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Mkrtchyan ASandvik JZhu V(2024)CEO Activism and Firm ValueManagement Science10.1287/mnsc.2023.497170:10(6519-6549)Online publication date: 1-Oct-2024
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