53rd CARF Seminar: Free Speech, the Right to Petition, and Corporate Innovation

Wednesday, June 12, 2024 10：30 – 12:00（Pre-registeration necessary)

Seminar Room 2, 1F of Economics Research Annex (Kojima Hall)
https://www.carf.e.u-tokyo.ac.jp/access/#campusmap

English

Hyun A (Shana) Hong
Associate Professor, University of California, Riverside
(co authored with Paul Zarowin and Ji Woo Ryou)

To safeguard the freedom of speech, the majority of U.S. states have enacted anti-
SLAPP (Strategic Lawsuits Against Public Participation) statutes. These laws serve as a
countermeasure to actions by firms to retaliate against those who disclose information not endorsed by their top management with SLAPP lawsuits. Using the staggered passage of the anti-SLAPP laws across states as a plausible exogenous shock to the right of public free speech, we find that the quantity and quality of corporate innovation increases after the passage. This increase is greater for firms with low quality pre-existing information environments and governance, supporting the view that anti-SLAPP laws serve to discipline managers’ choice of sub-optimal innovation projects.
We also show that stronger monitoring from anti-SLAPP laws lowers the cost of capital. Thus, rather than anti-SLAPP laws stifling the ability of firms to innovate by releasing information contrary to their interests (e.g., trade secrets), we conclude that the passage of anti-SLAPP laws has a real positive effect on the economy through its impact on corporate innovation.