Managerial Opportunism during Corporate Litigation
基于上市公司诉讼样本，发现法院判决比和解更有利于股东，即使公司败诉。模型用代理成本解释市场为何负面看待和解，实证表明治理弱、代理成本高的公司和解更快且市场反应更差。
ABSTRACT Using a large sample of litigation events involving publicly listed defendants, we document a surprising fact. The resolution of litigation through a court's decision dominates settlement of litigation from the shareholders' point of view, even when the firm loses. We develop a model using agency costs within the firm to explain why the market views settlement as a negative outcome on average and find empirical evidence supporting the implications of the model. Specifically, firms with weak corporate governance settle litigation more quickly, and the market reacts more negatively to settlements involving firms with higher agency costs.