Abstract
The purpose of this study is to investigate the impact of earnings management on the stock price crash risk in Asian economies by using the yearly dataset of 432 non-financial firms from 6 countries (i.e. Pakistan, India, China, Japan, Hong Kong, and Singapore) for the period from 2009 to 2020. The dependent variable i.e., stock price crash risk is measured by its two renowned proxies such as negative conditional skewness and down-up volatility. The data for earnings management, stock price crash risk, and all control variables are compiled from Thomson Reuters DataStream. To overcome autocorrelation and heteroscedasticity problems, the authors use generalized least square panel regression. The results indicate that earnings management significantly and positively influences the stock price crash risk. Overall, the findings of this study have several implications for investors, firm managers, regulators, and policymakers in understanding the key factors that determine the stock price crash risk specifically when it comes to non-financial firms in Asian economies.
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