Stock Price Crash Research Articles

CSR Initiatives of Controlling Shareholder in Share Pledge Firms: Sustainable Orientation or Interim Plan?

This paper investigates the effects of share pledge by controlling shareholder on corporate social responsibility and the mechanism through which stock pledge affects CSR. Using a sample of Chinese listed firms from 2008 to 2020, we find that firms with pledging controlling shareholders are more likely to invest in corporate social responsibility (CSR) than other firms. Their CSR also perform better even when all pledge funds are invested to shareholders themselves rather than to the company’s operation. We then provide evidence to show that the motivating effect of stock pledge by controlling shareholder on CSR is related to controlling shareholder’s incentives to improve corporate value to prevent loss of corporate control and reduce the risk of stock price crash. These results consistently suggest that controlling shareholders employ corporate social responsibility as an effective way to reduce the risk of controlling right transfer.

The Research on Non-Linear Relationship between Enterprise Digital Transformation and Stock Price Crash Risk

The Research on Non-Linear Relationship between Enterprise Digital Transformation and Stock Price Crash Risk

Common Institutional Ownership and Stock Price Crash Risk

Common Institutional Ownership and Stock Price Crash Risk

Tech for Stronger Financial Market Performance: Role of AI in Stock Price Crash Risk

Tech for Stronger Financial Market Performance: Role of AI in Stock Price Crash Risk

Social Capital and Stock Price Crash Risk

Social Capital and Stock Price Crash Risk

Data Breach Disclosures and Stock Price Crash Risk: Evidence from Data Breach Notification Laws

Data Breach Disclosures and Stock Price Crash Risk: Evidence from Data Breach Notification Laws

Firm-level Climate Change Exposure and Stock Price Crash Risk: International Evidence

Firm-level Climate Change Exposure and Stock Price Crash Risk: International Evidence

Do Foreign Investors Curb Stock Price Crash Risk? Evidence from Ownership Concentration in Taiwan

Using a specific dataset on foreign institutional ownership for firms in the Taiwan stock market during 2006-2020, this study explores robust new evidence that foreign institutional ownership concentration, a relatively small number of institutions own a large proportion of a firm’s shares, is negatively related to stock price crash risk, after controlling the level of such ownership. Further evidence shows that the negative effect of foreign institutional ownership concentration on crash risk is more pronounced for firms with higher foreign institutional ownership level, as well as with higher managerial agency problems. These findings are consistent with the hypothesis that while the level of foreign institutional ownership proxies for short-termism, the concentration of such ownership proxies for external monitoring that curbs future stock price crash risk. Our extensive evidence also indicates that the monitoring mechanism of foreign institutional ownership concentration serves as a complement for financial analysts and mass media, while as a substitute for big 4 auditors in minimizing future stock price crash risk.

How Does Management Respond to Stock Price Crashes?

How Does Management Respond to Stock Price Crashes?

Modern Health Pandemics Crises and Stock Price Crash Risk

Modern Health Pandemics Crises and Stock Price Crash Risk

Exploring the Links between Corporate Governance Mechanism, Accounting Conservatism, and Stock Price Crash Risk under the Complementary Role of IFRS Adoption in Pakistan

Exploring the Links between Corporate Governance Mechanism, Accounting Conservatism, and Stock Price Crash Risk under the Complementary Role of IFRS Adoption in Pakistan

Beyond Corporate Financial Disclosure: Impact of Abnormal Tone on Stock Price Crash Risk in China

The abnormal tone of corporate financial disclosures has recently received much academic attention. Despite China’s status as the world’s second-largest economy, studies of abnormal tone in corporate financial disclosure, especially on its influence on stock price crash risk, remain scarce. Therefore, we investigated the corporate financial disclosure of Chinese listed enterprises using Python and empirically tested the relationship between abnormal tone and stock price crash risk. The results show a positive relationship between abnormal tone and stock price crash risk. Further, abnormal tone may signal potential stock price crash risk, and managers could conceal managerial opportunism by adopting an abnormal tone in financial disclosure. Therefore, Chinese policymakers must be aware of the disclosure of abnormal tones and thereby strengthen the relevant assessment of corporate financial disclosure.

Textual Changes in 10-Ks and Stock Price Crash Risk: Evidence from Neural Network Embeddings

Textual Changes in 10-Ks and Stock Price Crash Risk: Evidence from Neural Network Embeddings

Data Breach Disclosures and Stock Price Crash Risk: Evidence from Data Breach Notification Laws

Data Breach Disclosures and Stock Price Crash Risk: Evidence from Data Breach Notification Laws

Option Market Liquidity and Stock Price Crash Risk

Option Market Liquidity and Stock Price Crash Risk

COVID-19, A Blessing in Disguise for the Tech Sector: Evidence from Stock Price Crash Risk

COVID-19, A Blessing in Disguise for the Tech Sector: Evidence from Stock Price Crash Risk

Social Capital and Stock Price Crash Risk: Cross-Country Evidence

Social Capital and Stock Price Crash Risk: Cross-Country Evidence

Director Nomination Eligibility Criteria and Stock Price Crash Risk

Director Nomination Eligibility Criteria and Stock Price Crash Risk

원가하방경직성의 정보효과：주가붕괴위험이 높은 기업을 중심으로

[연구목적] 본 연구는 주가붕괴위험이 높은 기업의 차기연도 하방경직적 원가행태가 자본시장에서 원가통제의 실패 또는 미래이익의 긍정적인 시그널로 작용되는지 검토하는 것에 그 목적이 있다.BR[연구방법] 본 연구는 2011부터 2018년까지 유가증권시장 상장기업들을 대상으로 기준연도 주가붕괴위험의 수준과 차기연도 원가하방경직성의 정도를 측정하고, 자본시장의 반응을 분석하기 위해 초과수익률을 산출한 후 회귀분석을 실시한다. 또한, 본 연구의 주요결과에 대한 기업지배구조의 조절효과도 살펴본다.BR[연구결과] 본 연구의 주요결과는 다음과 같다. 첫째, 기준연도 주가붕괴위험이 높은 기업일수록 평균적으로 차기연도 원가하방경직성이 높아지는 것으로 나타났다. 둘째, 기준연도 주가붕괴 위험이 높은 기업의 차기연도 원가하방경직성의 정도와 주가수익률은 양(＋)의 관계가 있는 것으로 나타났다. 셋째, 기준연도 주가붕괴위험이 높은 기업에서 차기연도 원가의 하방경직성이 높아짐에 따라 얻게 되는 초과수익률은 기업지배구조가 양호한 기업집단에서만 유의하게 나타났다.BR[연구의 시사점] 그동안 주가붕괴와 관련된 대부분의 선행연구들은 주가붕괴위험의 결정요인에 주목하였다. 이에 반해, 본 연구는 주가붕괴위험이 높았던 기업의 사후적 대처방안에 대한 실증증거를 제시하였다는 것에서 관련 문헌에 공헌점이 있을 것으로 판단한다. 또한, 주가붕괴위험이 높은 기업에서 강화된 원가하방경직성이 미래이익의 긍정적 시그널로 작용될 수 있음을 제시한 것에서 자본시장에 유용한 정보를 제공할 것으로 기대한다.

Firm-specific investor sentiment and stock price crash risk: The role of foreign investors in Korea’s stock market

Building on a prior study that documents that stock price crashes are positively associated with firm-specific investor sentiment (hereafter, the sentiment), this study further investigates the moderating effect of foreign investors on Korea’s stock market. This study hypothesizes that foreign investors as sophisticated participants are indifferent of the significant relationship between the sentiment and the stock price crashes. For firms listed on the KSE over the period of 2011–2019, the analysis findings show that the high stock crash risk attributable to the high sentiment is attenuated for firms with high foreign ownership. However, such moderating effect of foreign ownership disappears when taking foreign investment horizon into consideration. This implies that future stock crash risk reduction under the high sentiment is due to the corporate monitoring role of foreign investors, who are targeting a long-term investment horizon. This study adds to the literature on the role of foreign investors by suggesting that foreign investors act as a rigorous monitor helpful for managing stock price, rather than a price maker who is rational under the high sentiment.