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Title: Corporate Governance and Firm-specific Stock Price Crashes
Authors: Andreou, Panayiotis 
Antoniou, Constantinos 
Horton, Joanne G. 
Louca, Christodoulos 
Keywords: Agency risk;Corporate governance;Crash risk;Information environment
Category: Economics and Business
Field: Social Sciences
Issue Date: 1-Nov-2016
Publisher: Blackwell Publishing Ltd
Source: European Financial Management, 2016, vol. 22, no. 5, pp. 916-956
DOI: 10.1111/eufm.12084
Journal: European Financial Management 
Abstract: We investigate whether ownership structure, accounting opacity, board structure & processes and managerial incentives attributes relate to future stock price crash risk. Principal component analysis on the 21 attributes that comprise these four corporate governance dimensions reveals that they can explain between 13.1% and 23.0% of a one standard deviation in crash risk. Transient institutional ownership, CEO stock option incentives and the proportion of directors that hold equity increase crash risk, whilst insiders' ownership, accounting conservatism, board size and the presence of a corporate governance policy mitigate crash risk. Overall these relationships are more pronounced in environments that accentuate agency risk.
ISSN: 1354-7798
DOI: 10.1111/eufm.12084
Collaboration : Cyprus University of Technology
Durham University Business School
Warwick University
University of Exeter
Rights: © Wiley
Type: Article
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