Date of Award


Document Type

Campus Access Dissertation

Degree Name

Doctor of Philosophy (PhD)


Business Administration

First Advisor

Lucia Gao

Second Advisor

Atreya Chakraborty

Third Advisor

Sangwan Kim


My dissertation comprises three essays that focus on how investor sentiment and CSR engagement affect shareholder litigation and how litigation risk affects analyst forecast. Essay 1 is titled “Corporate Social Responsibility and Litigation Risk: Evidence from the Securities Class Action Lawsuits.” This essay investigates if a firm’s corporate social responsibility engagement mitigates the firm’s likelihood of shareholder litigation. Using a CSR measure derived from KLD data, I find that firms with higher CSR engagement face a lower likelihood of securities class action lawsuits and being repeat offenders. Moreover, the negative market reaction to the lawsuit filing is less pronounced for firms with higher CSR engagement. Essay 2 is titled “Do Analysts Perform a Monitoring Role? Evidence from Exogenous Shocks to Securities Class Action Lawsuits? Evidence from a Quasi-Natural Experiment.” In this essay, I examine the relation between analyst forecast properties and shareholder litigation. To examine the relationship between shareholder litigation and analyst forecast properties, I take advantage of the differential implementation of the Private Securities Litigation Reform Act (PSLRA) in the ninth circuit brought about by the 1999 ruling. I argue that as shareholder protection weaken with the decrease in litigation risk, the demand for information from analysts increases to fill in the vacuum in external governance. Consequently, I find analyst following and forecast accuracy is higher for firm’s subject to lower shareholder litigation risk. Lastly, Essay 3 of my dissertation is titled “Investor Sentiment and Shareholder Litigation: Evidence from Securities Class Action Lawsuits.” In this essay, using various proxies for firm-specific, industry and market sentiment, I investigate if investor sentiment influences a firm’s likelihood of shareholder litigation. A higher likelihood of shareholder litigation follows a higher firm-specific sentiment period. The market reactions to SCAL filing are more negative for higher levels of firm-specific sentiment. On the other hand, the likelihood of securities class action lawsuits being filed is lower if the market sentiment was higher in the prior year. I also find that higher market investor sentiment increases the likelihood of dismissal.


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Available for download on Friday, May 31, 2024