Executive Promotion Incentives and Stock Crash

Abstract

This paper empirically examines the impact of executive promotion incentive on the risk of company stock crash by using the data of 2005-2015 Shanghai-Shenzhen A-share listed companies. The results show that the incentives for executive promotion are positively related to the risk of stock collapse. When the degree of information asymmetry is higher, the positive correlation between the promotion incentives of the company executives and the risk of stock collapse will be more significant; when the company's operating performance is poor, the positive correlation between the company's executive promotion incentives and the stock crash risk will also be more significant. This paper not only enriches the research on the promotion incentives of executives, but also has certain implications for the research and governance of stock crash.