Bofu Deng , Zhenge Peng , Kam C. Chan , Hongce Chen
{"title":"Top management team stability and stock price crash risk: Evidence from China","authors":"Bofu Deng , Zhenge Peng , Kam C. Chan , Hongce Chen","doi":"10.1016/j.irfa.2025.104126","DOIUrl":null,"url":null,"abstract":"<div><div>We empirically examine the association between top management team stability and stock price crash risk. Using a sample of Chinese listed companies for 2007–2021, we find that top management team stability has a negative effect on stock price crash risk. Mechanism tests show that this effect operates through reducing business risk, agency costs and improving information quality. Additional analysis reveals that this relationship is more pronounced in companies audited by non-Big Four firms and those with high executive shareholding. Our study integrates the characteristics of internal human capital teams with capital market information efficiency, offering a novel contribution to the literature on stock price crash risk.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104126"},"PeriodicalIF":7.5000,"publicationDate":"2025-03-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1057521925002133","RegionNum":1,"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
We empirically examine the association between top management team stability and stock price crash risk. Using a sample of Chinese listed companies for 2007–2021, we find that top management team stability has a negative effect on stock price crash risk. Mechanism tests show that this effect operates through reducing business risk, agency costs and improving information quality. Additional analysis reveals that this relationship is more pronounced in companies audited by non-Big Four firms and those with high executive shareholding. Our study integrates the characteristics of internal human capital teams with capital market information efficiency, offering a novel contribution to the literature on stock price crash risk.
期刊介绍：
The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.
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