ABSTRACT
Using the staggered adoption of anti-SLAPP laws across US states, we find that firms increase cash holdings when negative firm-specific information becomes easier to disseminate. Cross-sectional evidence points to competitive pressure rather than stakeholder scrutiny: the increase is concentrated in more competitive industries and in settings with greater predation risk. We also document within-industry reallocation following adoption. Large firms gain market power and expand through acquisitions, whereas small firms lose market share and build larger cash buffers. Our results indicate that greater exposure to unfavorable information can both increase liquidity risks and shift competitive advantage toward stronger incumbents.
Chen, S and Huson, Mark R and Meng, Chong, As Bad News Spreads: Anti-SLAPP Laws and Scale-Dependent Transparency Costs (February 21, 2026).
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