ABSTRACT
We examine whether legal protection for public criticism affects corporate product quality. Strategic lawsuits against public participation (SLAPPs) can deter employees, customers, journalists, and other stakeholders from communicating unfavorable information, even when the underlying claims lack merit. State anti-SLAPP laws reduce this threat by providing expedited dismissal procedures and, in many states, fee shifting. Exploiting staggered state enactments, we estimate stacked difference-indifferences models for US public firms over 1996-2022. We find that anti-SLAPP enactment is associated with a 1.37-percentage-point decline in the annual probability of a product recall, equivalent to 22.1% of the sample mean. Event-study estimates show no joint evidence of differential pre-enactment trends, and the decline emerges after enactment and persists throughout the post-treatment window. The effect is stronger under more protective statutes and remains robust to alternative fixed effects, headquarters measures, event windows, reweighting, and staggered-adoption estimators. Because observed recalls reflect both the incidence and detection of defects, the negative reduced-form effect indicates that firms’ preventive responses dominate any countervailing increase in defect revelation; it does not imply that stakeholder disclosure declines. Our findings identify legal protection for stakeholder criticism as an institutional determinant of product quality and demonstrate that speech protections can influence corporate operating outcomes beyond disclosure and capital markets.
Imran Hossain, Md and Rahman, Dewan and Neupane, Suman, When Critics Can Speak: Anti-SLAPP Laws and Product Quality Failures (August 1, 2025).
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