Abstract
Using data on corrupt senior officials in China, we find that corruption investigations significantly increase the stock price crash risk for listed firms located in the provinces where the senior officials formerly worked, and the impact is positively related to the officials’ political level. Channel tests find that corruption investigations increase negative news, which results in an increase in crash risk. Additional tests document that state-owned enterprises and politically connected firms experience lower crash risk, and the impact is more significant in more-developed provinces. In addition, we find that firms directly associated with investigated officials experience negative cumulative abnormal returns.
| Original language | English |
|---|---|
| Pages (from-to) | 4261-4271 |
| Number of pages | 11 |
| Journal | Emerging Markets Finance and Trade |
| Volume | 57 |
| Issue number | 15 |
| DOIs | |
| Publication status | Published - 2021 |
Keywords
- Corruption investigations
- information disclosure
- stock price crash risk
Fingerprint
Dive into the research topics of 'The Impact of Corruption Investigations on Stock Price Crash Risk: Evidence from the Crackdown on “Tigers” in China'. Together they form a unique fingerprint.Cite this
- APA
- Author
- BIBTEX
- Harvard
- Standard
- RIS
- Vancouver