Companies’ Politics Affect the Lawsuits They Face

What's Hot

Do This or Your iPhone Bill May SkyrocketSave

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

11 Places in the World Where You Can Afford to Retire in StyleMore

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

32 of the Highest-Paid American SpeakersMake

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

9 Tips to Ensure You’ll Have Enough to RetireFamily

30 Awesome Things to Do in RetirementCollege

5 Spots Where Retirees Can Live for Less Than $40,000Real Estate

10 Ways to Reduce Your Homeowner’s Insurance RatesFamily

10 Ways to Pull Together the Down Payment for a HomeCredit & Debt

Chew on This: The Story Behind Your Hershey’s Halloween TreatsBusiness

A new study says Republican-leaning firms get sued more often for civil rights issues. Democrats? More often for securities fraud.

New research from The University of Miami School of Business Administration suggests the political leanings of a company affect what lawsuits it ends up in.

“Democratic-leaning firms are less likely than Republican-leaning firms to be sued for environmental, labor, and civil rights violations,” the study from the school’s finance department says. “Firms with a Republican culture are less likely than Democratic-oriented firms to face legal action for securities fraud and intellectual property rights violations.”

The researchers collected all the litigation against companies over a 15-year period (almost 53,000 lawsuits, which works out to nearly 10 per day) and categorized it. They analyzed political culture through campaign contributions and political action committee support.

Other key findings…

  • Compared to firms with a Republican culture, Democratic-leaning firms are 13.6 percent less likely to be the subject of employment civil rights litigation, 4 percent less likely to be the subject of labor litigation, and .8 percent less likely to be the subject of environmental litigation.
  • Compared to firms with strong Democratic culture, Republican firms are 2.4 percent less likely to be sued for securities violations and 5.6 percent less likely to be sued for intellectual property violations.
  • Republican-leaning firms are 8 percent more likely to face litigation in general compared to firms with a strong Democratic culture.
  • On average, the stock market reacts more negatively to litigation events involving firms with a Republican culture, perhaps because investors are more surprised. Thus, the relations between political culture and litigation propensity across different domains is not fully recognized by the stock market. Investors hold an incorrect prior belief that Republican firms are less likely to engage in wrongdoing in most domains.
Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 7 Ways to Save More at Big Lots

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,705 more deals!