Investor Sentiment, Financial Report Quality and Stock Price Crash Risk: Role of Short-Sales Constraints

2015 ◽  
Vol 53 (3) ◽  
pp. 493-510 ◽  
Author(s):  
Yugang Yin ◽  
Rongfu Tian
Keyword(s):  
Stock Price ◽  
Investor Sentiment ◽  
Crash Risk ◽  
Short Sales ◽  
Financial Report ◽  
Report Quality

scholarly journals The Information Role of Earnings Conference Call Tone: Evidence from Stock Price Crash Risk

2019 ◽  
Author(s):  
Xi Fu ◽  
Xiaoxi Wu ◽  
Zhifang Zhang
Keyword(s):  
Stock Price ◽  
Predictive Power ◽  
Crash Risk ◽  
Conference Calls ◽  
Conference Call ◽  
Public Firms ◽  
Equity Incentives ◽  
Disclosure Tone

Abstract This paper investigates whether and how the disclosure tone of earnings conference calls predicts future stock price crash risk. Using US public firms’ conference call transcripts from 2010 to 2015, we find that firms with less optimistic tone of year-end conference calls experience higher stock price crash risk in the following year. Additional analyses reveal that the predictive power of tone is more pronounced among firms with better information environment and lower managerial equity incentives, suggesting that extrinsic motivations for truthful disclosure partially explain the predictive power of conference call tone. Our results shed light on the long-term information role of conference call tone by exploring the setting of extreme future downside risk, when managers have conflicting incentives either to unethically manipulate disclosure tone to hide bad news or to engage in ethical and truthful communication.

Foreign Investors, External Monitoring, and Stock Price Crash Risk

2019 ◽  
Vol 35 (4) ◽  
pp. 829-853
Author(s):  
Jeong-Bon Kim ◽  
Xiaoxi Li ◽  
Yan Luo ◽  
Kemin Wang
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Reporting Quality ◽  
Crash Risk ◽  
Accrual Quality ◽  
Foreign Investors ◽  
External Monitoring ◽  
Risk Reducing ◽  
Local Firms

We investigate whether foreign investors help to reduce local firms’ future stock price crash risk through their external monitoring. We find that the entrance of foreign investors is associated with a significant reduction in local firms’ future crash risk. Further investigation reveals that foreign investors help to improve local firms’ financial reporting quality from the perspectives of accrual quality, conservatism, and annual report tone management. The evidence is consistent with our conjecture that foreign investors play an important external monitoring role, which reduces managerial bad-news hoarding and thereby lowers local firms’ future crash risk. We also find that the crash risk–reducing role of foreign investors is more pronounced when foreign investors are more familiar with the institutional background of the host country, when they have stronger incentives to monitor local firms, and when local firms have higher governance efficacy. A variety of robustness checks reveals that our results are unlikely to be driven by potential endogeneity.

scholarly journals Investor Sentiment and Stock Price Crash Risk in the Chinese Stock Market

2021 ◽  
Vol 2021 ◽  
pp. 1-10
Author(s):  
Binghui Wu ◽  
Yuanman Cai ◽  
Mengjiao Zhang
Keyword(s):  
Comparative Analysis ◽  
Stock Market ◽  
Stock Price ◽  
Stock Exchange ◽  
Investor Sentiment ◽  
Crash Risk ◽  
Research Approach ◽  
Chinese Stock Market ◽  
The Impact ◽  
A Share

This paper uses the partial least squares method to construct the investor sentiment index in Chinese stock market. The Shanghai Stock Exchange 180 Index and the Shenzhen Stock Exchange 100 Index are used as samples. From the perspectives of holistic sentiment and heterogeneous sentiment, this paper studies the impact of investor sentiment on stock price crash risk. The results show that investor sentiment can significantly affect stock price crash risk in Shanghai and Shenzhen A-share markets, especially in the Shenzhen A-share market no matter from which perspective. And investor pessimism has a greater impact on stock price crash risk in the Shenzhen A-share market from the perspective of heterogeneous sentiment. Compared with the available researches, this paper makes two contributions: (i) the comparative analysis is adopted to discuss the differences between Shanghai and Shenzhen A-share markets, abandoning the research approach that takes the two markets as a whole in existing literature, and (ii) this paper not only studies the impact of investor holistic sentiment on stock price crash risk from a macro perspective, but also adds a more micro heterogeneous sentiment and conducts a comparative analysis.

Does intellectual capital have any influence on stock price crash risk?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Agung Nur Probohudono ◽  
Adelia Dyaning Pratiwi ◽  
Mahameru Rosy Rochmatullah
Keyword(s):  
Intellectual Capital ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Investor Sentiment ◽  
Price Volatility ◽  
Crash Risk ◽  
Company Performance ◽  
Content Type ◽  
The Impact

PurposeThis paper explores the influence between intellectual capital (IC) and the risk of stock price crashes by using company performance as an intervening variable.Design/methodology/approachThis study empirically analyzes the impact of the efficiency of IC on stock price crash risk using a sample size of 152 companies listed on the Indonesia Stock Exchange (IDX) during 2018. To test the research hypotheses, regression analysis and path analysis were applied. In addition, the researchers added exploration to several studies to strengthen the results of this study.FindingsThis study’s findings indicate that investors' optimistic (pessimistic) sentiment regarding stock price volatility has obscured aspects of the financial performance of listed companies. This finding implies that investor sentiment has dominated influence on stock price crash risk so that the aspects of IC are obscured.Originality/valueThis research provides new information that IC disclosure in the stock market needs to include knowledge of the volatility of stock prices in order to reveal stock price crash risk.

scholarly journals How Does the Accounting Conservatism Affect the Stock Price Crash Risk in Pakistan: The Complementary Role of Managerial and Institutional Ownership

2021 ◽  
Vol 7 (3) ◽  
pp. 607-621
Author(s):  
Aon Waqas ◽  
Danish Ahmed Siddiqui
Keyword(s):  
Stock Prices ◽  
Information Disclosure ◽  
Stock Price ◽  
Panel Data Analysis ◽  
Institutional Ownership ◽  
Accounting Conservatism ◽  
Crash Risk ◽  
Agency Conflicts ◽  
Complementary Role

Purpose: The conservatism of accounting and robustness of accounting information disclosure may restrain the irrational behavior of investors and help to reduce the risk of stock price crashes. This study aims to explore this in the context of developing country Pakistan. More specifically, this study investigates the effect of accounting conservatism on stock price crash risk. We also examine the complementary role of managerial and institutional ownership in strengthening this effect. Design/Methodology/Approach: This study conducts the panel data analysis of 155 nonfinancial firms listed in PSX from 2007 to 2019. This study calculates the C-Score to measure accounting conservatism. This study measures the firm’s stock price crash risk by calculating the DUVOL of weekly share prices. Findings: This study finds that there is a significant negative effect of accounting conservatism on firms’ stock price crash risk. This study also finds that managerial ownership enhances the stock price crash risk of the sample firms significantly as a moderator while there is no significant moderating influence of institutional ownership. Implications/Originality/Value: The competent authorities of Pakistan should consider agency conflicts. They should direct the firms’ management to share equal information in time regardless of whether the information is good or bad for stock prices.

Sign in / Sign up

Export Citation Format

Share Document