Does the CFO’s foreign experience affect the risk of corporate litigation?

• Radwan Alkebsee ^[2] ; Ahsan Habib ^[1] ; Jinfeng Zhu ^[2] ; Shuai Wu ^[2]
  1. [1] Massey University

     Massey University

     Nueva Zelanda

     
  2. [2] Xi’an International Studies University, Xian, Shaanxi, China
• Localización: Revista española de financiación y contabilidad, ISSN 0210-2412, Vol. 54, Nº 3, 2025, págs. 284-318
• Idioma: inglés
• DOI: 10.1080/02102412.2025.2498873
• Texto completo no disponible (Saber más ...)
• Resumen

  • This study examines the relationship between the Chief Financial Officer’s (CFO) foreign experience and corporate litigation. Using data from Chinese-listed firms spanning 2010 to 2022, we document a negative and significant association between the CFO’s foreign experience and corporate litigation. Further, using a specific measure for litigation risk (securities class-action (SCA) lawsuits), we find that CFOs’ foreign experience reduces the number of SCA lawsuits. We also explore the moderating effect of the internal control environment (ICE) and information uncertainty on the association between the CFO’s foreign experience and corporate litigation and SCA lawsuits and find that the beneficial effect of the CFO’s foreign experience in reducing the number of lawsuits is more pronounced in firms with strong ICE and high information uncertainty. Our results remain consistent after controlling for endogeneity concerns. Our study contributes to the literature on corporate litigation and has implications for regulatory bodies and public firms.

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