Abstract
AbstractThis paper investigates the impact of connected institutional investors on stock price crash risk. We document that the closer institutions are to the central position of the network, the greater the stock price crash risk, whereas the closer they are to the intermediary position, the smaller the stock price crash risk. Such results remain strong after conducting several robustness checks. Further evidences demonstrate that the collusion effect of central position, which is more pronounced for firms with higher insider ownership concentration, lower institutional ownership and lower regional marketization index, works through managers' asymmetric news disclosure, whereas the monitoring effect of intermediary position, which is more pronounced for firms with higher insider ownership concentration, higher institutional ownership and lower regional marketization index, works through better informativeness and control. Overall, our analyses provide insights into the relation between social embeddedness of individual economic activities and corporate governance.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
