In this article, we investigate how institutional investors help mitigate business‐related risks in a corporate environment. Using a large sample of employment disputes, litigations, and court cases, we find that institutional investors play a significant role in reducing employment litigation. We observe that firms with larger shares of institutional ownership have a lower incidence of employment lawsuits and that long‐term institutional investors are more effective at decreasing employee mistreatment. Our results suggest that institutional investors can improve the employee work environment and help mitigate future employee litigation. The improvement in employee work conditions has been shown to increase a firm's value through increased employee output, reduced litigation, and direct and indirect costs. Our results shed light on the effectiveness of institutional monitoring on a firm's litigation risk.

中文翻译：

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机构监控和诉讼风险：来自员工纠纷的证据

在本文中，我们研究机构投资者如何在公司环境中帮助减轻与业务相关的风险。通过大量的雇佣纠纷，诉讼和法院案件样本，我们发现机构投资者在减少雇佣诉讼方面发挥着重要作用。我们观察到，拥有机构所有权份额较大的公司的雇佣诉讼发生率较低，而长期机构投资者在减少员工虐待方面更有效。我们的结果表明，机构投资者可以改善员工的工作环境，并有助于减轻未来的员工诉讼。事实证明，员工工作条件的改善可以通过增加员工产量，减少诉讼以及直接和间接成本来提高公司的价值。