| Item Type |
Monograph
(Working Paper)
|
| Abstract |
We study the role of competition in customers’ reactions to litigation against firms, using anonymized mobile phone location data. A class action lawsuit filing results in a 4% average reduction in customer visits to target firms’ outlets in the following months. The effect strongly depends on competition. Outlets facing more competition experience significantly larger negative effects. Closer competition matters more, both in terms of geographic and industry proximity. Announcement returns and quarterly accounting revenues around lawsuit filings also strongly depend on competition. Our results suggest that competition is an important component in customers’ ability to discipline firms for misbehavior. |
| Authors |
von Meyerinck, Felix; Pursiainen, Vesa & Schmid, Markus |
| Language |
English |
| Keywords |
class action lawsuits, corporate misbehavior, competition, reputational costs |
| Subjects |
economics
finance |
| HSG Classification |
contribution to scientific community |
| HSG Profile Area |
SOF - System-wide Risk in the Financial System |
| Refereed |
Yes |
| Date |
April 2021 |
| Contact Email Address |
markus.schmid@unisg.ch |
| Depositing User |
Beatrix Kobelt-Glock
|
| Date Deposited |
20 Apr 2021 07:08 |
| Last Modified |
20 Jul 2022 17:45 |
| URI: |
https://www.alexandria.unisg.ch/publications/263044 |
Competition and the reputational costs of litigation
![[img]](http://www.alexandria.unisg.ch/style/images/fileicons/oa_orange.png)
