Common institutional ownership and stock price crash risk

IF 3.2 3区 管理学 Q1 BUSINESS, FINANCE
Shenglan Chen, Hui Ma, Qiang Wu, Hao Zhang
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引用次数: 0

Abstract

This paper presents new evidence on the economic benefits arising from common institutional ownership. We find a negative and significant effect of common institutional ownership on stock price crash risk. This effect is robust to a battery of robustness checks and is causal according to some identification tests, including difference-in-differences analyses on financial institution mergers. We find evidence that the negative effect is attributable to the monitoring role of common institutional owners—a role that is enabled by common owners' lower information processing cost and greater monitoring incentives owing to governance externalities. We also find that common owners negatively influence crash risk through constraining bad news hoarding and that common owners are more likely to force CEO turnover when a firm has higher crash risk. Overall, our results suggest that common institutional shareholders play a unique and effective monitoring role that fends off stock price crashes.

普通机构所有权与股价暴跌风险
本文提出了共同机构所有权带来经济效益的新证据。我们发现,共同机构所有权对股价暴跌风险有显著的负面影响。这种效应在一系列稳健性检验中都是稳健的,而且根据一些识别检验,包括对金融机构合并的差异分析,这种效应是因果关系。我们发现的证据表明,这种负面影响可归因于普通机构所有者的监督作用--普通所有者的信息处理成本较低,且由于治理外部性而具有更强的监督激励,从而使这种作用得以发挥。我们还发现,共同所有者通过限制坏消息囤积对崩盘风险产生负面影响,而且当公司崩盘风险较高时,共同所有者更有可能迫使首席执行官更替。总之,我们的研究结果表明,普通机构股东发挥了独特而有效的监督作用,从而避免了股价暴跌。
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来源期刊
CiteScore
6.20
自引率
11.10%
发文量
97
期刊介绍: Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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