We use the enactment of limited liability legislation across Canadian provinces to examine the effect of the change in liability status on firm outcomes for a group of public firms known as income trusts. We show that the switch from unlimited to limited liability increases trusts' institutional ownership, net external financing, investments, profitability, payouts, and riskiness.
Our results are stronger for energy trusts, which are more capital-intensive and face potentially greater liability risks. Our event study shows positive cumulative abnormal returns around the legal changes. Overall, we present a novel approach to test the impact of limited liability on firms.
In recent times, there has been an unprecedented surge in national security review (NSR) measures, with host jurisdictions implementing restrictions...
We analyze the impact of a large shareholder disclosing its voting decisions prior to shareholder meetings on final vote outcomes for management and...
The phenomenon of groups of companies is very common in modern corporate reality. The empirical data on groups of companies are heterogeneous because...