Journal ArticleDOI
Institutional investor stability and crash risk: Monitoring versus short-termism?
Jeffrey L. Callen,Xiaohua Fang +1 more
TLDR
In this paper, the authors present evidence that institutional investor stability is negatively associated with 1-year-ahead stock price crash risk, consistent with the monitoring theory of institutional investors but not the short-termism theory.Abstract:
This study tests two opposing views of institutional investors—monitoring versus short-termism. We present evidence that institutional investor stability is negatively associated with 1-year-ahead stock price crash risk, consistent with the monitoring theory of institutional investors but not the short-termism theory. Our findings are shown to be robust to alternative empirical specifications, estimation methods and endogeneity concerns. In addition, we find that institutional ownership by public pension funds (bank trusts, investment companies, and independent investment advisors) is significantly negatively (positively) associated with future crash risk, consistent with findings that pension funds more actively monitor management than other types of institutions.read more
Citations
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Journal ArticleDOI
CEO Overconfidence and Stock Price Crash Risk
TL;DR: This article examined the association between chief executive officer (CEO) overconfidence and future stock price crash risk and found that firms with overconfident managers overestimate the returns to their investment projects and misperceive negative net present value (NPV) projects as value creating.
Journal ArticleDOI
CEO Overconfidence and Stock Price Crash Risk
TL;DR: This paper examined the association between chief executive officer (CEO) overconfidence and future stock price crash risk and found that firms with overconfident managers overestimate the returns to their investment projects and misperceive negative net present value (NPV) projects as value creating.
Journal ArticleDOI
Financial statement comparability and expected crash risk
TL;DR: This paper examined the impact of financial statement comparability on ex ante crash risk and found that expected crash risk decreases with comparability, and this negative relation is more pronounced in an environment where managers are more prone to withhold bad news.
Journal ArticleDOI
Trust and stock price crash risk: evidence from China
TL;DR: Wang et al. as mentioned in this paper examined the impact of social trust on stock price crash risk and found that firms headquartered in regions of high social trust tend to have smaller crash risks.
Journal ArticleDOI
CEO age and stock price crash risk
Panayiotis C. Andreou,Panayiotis C. Andreou,Christodoulos Louca,Christodoulos Louca,Andreas P. Petrou +4 more
TL;DR: The authors show that firms with younger CEOs are more likely to experience stock price crashes, including crashes caused by revelation of negative news in the form of breaks in strings of consecutive earnings increases.
References
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Journal ArticleDOI
Specification Tests in Econometrics
TL;DR: In this article, the null hypothesis of no misspecification was used to show that an asymptotically efficient estimator must have zero covariance with its difference from a consistent but asymptonically inefficient estimator, and specification tests for a number of model specifications in econometrics.
Posted Content
A Survey of Corporate Governance
TL;DR: The authors surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around the world, and presents a survey of the literature.
Journal ArticleDOI
A Survey of Corporate Governance
Andrei Shleifer,Robert W. Vishny +1 more
TL;DR: Corporate Governance as mentioned in this paper surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around the world, and shows that most advanced market economies have solved the problem of corporate governance at least reasonably well, in that they have assured the flows of enormous amounts of capital to firms, and actual repatriation of profits to the providers of finance.
Journal ArticleDOI
Large Shareholders and Corporate Control
Andrei Shleifer,Robert W. Vishny +1 more
TL;DR: In this article, the authors explore a model in which the presence of a large minority shareholder provides a partial solution to the free-rider problem in a corporation with many small owners, where the corporation may not pay any one of them to monitor the performance of the management.
Book
A Guide to Econometrics
TL;DR: The fourth edition of "A Guide to Econometrics" provides an overview of the subject and an intuitive feel for its concepts and techniques without the notation and technical detail often characteristic of econometric textbooks.