Abstract
In this paper, we investigate if the perceived name-based ethnicity of CEOs has any relationship with the likelihood of shareholder class-action lawsuits. Using machine learning algorithms on CEO names, we develop an objective proxy of name-based ethnicity and find that firms managed by ‘foreign-sounding’ CEOs exhibit a lower likelihood of class-action lawsuits. Our results are robust to matched sample analysis, Heckman two-stage selection, alternate model specifications as well as use of an alternate proxy. We further find that succession of a foreign-sounding CEO by a non-foreign-sounding CEO increases the likelihood of class-action lawsuits. Our paper has important implications for firms, especially in high litigation industries or high litigation situations.
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Recommended Citation
Ganji, Gajanan; Kale, Arati; and Kale, Devendra
(2024)
"To Sue or Not To Sue?: Foreign-Sounding CEO Name and Class-Action Lawsuits,"
American Business Review: Vol. 27:
No.
1, Article 2.
DOI: 10.37625/abr.27.1.5-95
Available at:
https://digitalcommons.newhaven.edu/americanbusinessreview/vol27/iss1/2
DOI
10.37625/abr.27.1.5-95
