{"title":"Institutional investor horizons and stock price crash risk","authors":"","doi":"10.1016/j.ribaf.2024.102509","DOIUrl":null,"url":null,"abstract":"<div><p>This study examines how institutional investor investment horizons impact stock price crash risk for China’s A-share firms from 2007 to 2019. Long-term investments by institutions significantly mitigate risk by curbing managerial myopia, enhancing transparency, and improving accountability, thus deterring self-serving behavior. Moreover, long-term shareholding and professional investment indeed strengthen institutional investor supervision and corporate governance, reducing stock price crash risk. This paper also discusses institutional investor characteristics, such as herding behavior, information competition, and cliques, as well as external environmental factors, such as investor protection and external monitoring, on institutional investor horizons. Furthermore, effective internal governance, such as diversity of board sources and the diligence of audit committees, can amplify the risk reduction effects of long-term institutional investment.</p></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":null,"pages":null},"PeriodicalIF":6.3000,"publicationDate":"2024-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in International Business and Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0275531924003027","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study examines how institutional investor investment horizons impact stock price crash risk for China’s A-share firms from 2007 to 2019. Long-term investments by institutions significantly mitigate risk by curbing managerial myopia, enhancing transparency, and improving accountability, thus deterring self-serving behavior. Moreover, long-term shareholding and professional investment indeed strengthen institutional investor supervision and corporate governance, reducing stock price crash risk. This paper also discusses institutional investor characteristics, such as herding behavior, information competition, and cliques, as well as external environmental factors, such as investor protection and external monitoring, on institutional investor horizons. Furthermore, effective internal governance, such as diversity of board sources and the diligence of audit committees, can amplify the risk reduction effects of long-term institutional investment.
期刊介绍:
Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance