Abstract
The purpose of this paper is to examine whether product market competition is a means of external shareholders’ protection likely to decrease the stock price crash risk. The results show that product market competition is an effective corporate governance mechanism that is likely to constrain managers to disclose bad news regularly to the market, which in turn mitigates the risk of stock price crashes. The results also show that the negative effect of product market competition on stock price crashes is more pronounced for owner-managers. These results suggest that managerial ownership is likely to align managerial interests with shareholders ones.
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.
