Pub Date : 2025-07-16DOI: 10.1016/j.jbef.2025.101083
Yixuan Rui, Robert B. Durand
Hedge funds tend to significantly reduce their shareholdings when a firm’s short interest is high and its share price is close to its 52-week high. In addition, hedge funds in general are more likely to increase their holdings when the share price is falling away from its 52-week high and the short interest is low. Mutual funds, pension funds, and other institutional investors typically do not engage in such specialized trading strategies. The trading behavior of hedge funds demonstrates that they follow a contrarian strategy and use short interest to exploit the near-term reversal of price movements.
{"title":"Hedge Funds, Short Sales, and the 52-week High","authors":"Yixuan Rui, Robert B. Durand","doi":"10.1016/j.jbef.2025.101083","DOIUrl":"10.1016/j.jbef.2025.101083","url":null,"abstract":"<div><div>Hedge funds tend to significantly <em>reduce</em> their shareholdings when a firm’s short interest is high and its share price is close to its 52-week high. In addition, hedge funds in general are more likely to <em>increase</em> their holdings when the share price is falling away from its 52-week high and the short interest is low. Mutual funds, pension funds, and other institutional investors typically do not engage in such specialized trading strategies. The trading behavior of hedge funds demonstrates that they follow a contrarian strategy and use short interest to exploit the near-term reversal of price movements.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101083"},"PeriodicalIF":4.7,"publicationDate":"2025-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144842626","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-04DOI: 10.1016/j.jbef.2025.101081
Zilong Liu, Hongyan Liang
This study investigates whether credit scoring systems inherently disadvantage women within the subprime borrowing context, where alternative credit data is frequently used. While recent advancements in machine learning and alternative data usage promise greater fairness and accuracy in lending, our findings highlight systemic biases embedded within current credit scoring models. Using a comprehensive sample of alternative borrowers, our analysis reveals that women consistently receive lower credit scores than men, despite exhibiting lower default rates and controlling for extensive credit risk variables. Furthermore, credit scores demonstrate systematically reduced predictive accuracy for women compared to men, underscoring gender biases embedded within these scoring systems. These findings emphasize the urgent need to recalibrate credit scoring models to enhance fairness, accuracy, and financial inclusivity.
{"title":"Are credit scores gender-neutral? Evidence of mis-calibration from alternative and traditional borrowing data","authors":"Zilong Liu, Hongyan Liang","doi":"10.1016/j.jbef.2025.101081","DOIUrl":"10.1016/j.jbef.2025.101081","url":null,"abstract":"<div><div>This study investigates whether credit scoring systems inherently disadvantage women within the subprime borrowing context, where alternative credit data is frequently used. While recent advancements in machine learning and alternative data usage promise greater fairness and accuracy in lending, our findings highlight systemic biases embedded within current credit scoring models. Using a comprehensive sample of alternative borrowers, our analysis reveals that women consistently receive lower credit scores than men, despite exhibiting lower default rates and controlling for extensive credit risk variables. Furthermore, credit scores demonstrate systematically reduced predictive accuracy for women compared to men, underscoring gender biases embedded within these scoring systems. These findings emphasize the urgent need to recalibrate credit scoring models to enhance fairness, accuracy, and financial inclusivity.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101081"},"PeriodicalIF":4.3,"publicationDate":"2025-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144595732","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-04DOI: 10.1016/j.jbef.2025.101080
Zunaidah Sulong , Md. Habibur Rahman Fuszder , Mohammad Abdullah , Emmanuel Joel Aikins Abakah
This paper investigates the influence of cybersecurity risk on banks’ risk-taking behavior. Utilizing data from U.S. banks spanning 1998–2018, we find that heightened cybersecurity risk is associated with increased risk-taking by banks. These findings remain robust across various alternative proxies and persist even after addressing endogeneity issues. Further analysis indicates that this positive relationship is more pronounced among banks facing greater competitive pressure, higher IT investment, increased deposit withdrawals, and more negative disclosure sentiment. Conversely, the relationship is attenuated in banks with substantial goodwill and a more positive disclosure tone. Sub-sample analyses show that the effect is particularly strong for smaller banks and those with elevated financial vulnerability. These findings have important implications for the digital transformation of the banking sector.
{"title":"Cybersecurity risk and bank risk-taking","authors":"Zunaidah Sulong , Md. Habibur Rahman Fuszder , Mohammad Abdullah , Emmanuel Joel Aikins Abakah","doi":"10.1016/j.jbef.2025.101080","DOIUrl":"10.1016/j.jbef.2025.101080","url":null,"abstract":"<div><div>This paper investigates the influence of cybersecurity risk on banks’ risk-taking behavior. Utilizing data from U.S. banks spanning 1998–2018, we find that heightened cybersecurity risk is associated with increased risk-taking by banks. These findings remain robust across various alternative proxies and persist even after addressing endogeneity issues. Further analysis indicates that this positive relationship is more pronounced among banks facing greater competitive pressure, higher IT investment, increased deposit withdrawals, and more negative disclosure sentiment. Conversely, the relationship is attenuated in banks with substantial goodwill and a more positive disclosure tone. Sub-sample analyses show that the effect is particularly strong for smaller banks and those with elevated financial vulnerability. These findings have important implications for the digital transformation of the banking sector.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101080"},"PeriodicalIF":4.3,"publicationDate":"2025-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144581231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-27DOI: 10.1016/j.jbef.2025.101079
Han Ren , Shiwei Sun , Zhengqiang Zhong , Song Wang
Understanding why females and males differ in financial risk-taking is important for both theory and practice. This study integrates neuroscience and behavioral data to examine how sex differences in brain structure-indexed by gray matter volume (GMV)-and brain function-indexed by resting-state functional connectivity (RSFC)-relate to financial risk propensity (FRP) among full-time employees (N = 144; 72 females, 72 males). We found that the association between FRP and GMV in the left superior parietal lobule (SPL), a region involved in emotion regulation and numerical processing, was positive in females but negative in males. Additionally, only in females was lower FRP linked to stronger RSFC between the left SPL and the right hippocampus, a region critical for future-oriented thinking and memory. We also found a significant indirect effect of FRP on the relationship between RSFC and willingness to take risks in investment and career domains for females, but not for males. These findings suggest that in females, greater neural integration of emotional control, numerical reasoning, and prospection may support more cautious financial decisions. This research offers new insights into the neural basis of sex differences in financial decision-making and carries important theoretical and practical implications.
{"title":"Why do females display lower financial risk propensity than males? Evidence from structural MRI and resting-state fMRI","authors":"Han Ren , Shiwei Sun , Zhengqiang Zhong , Song Wang","doi":"10.1016/j.jbef.2025.101079","DOIUrl":"10.1016/j.jbef.2025.101079","url":null,"abstract":"<div><div>Understanding why females and males differ in financial risk-taking is important for both theory and practice. This study integrates neuroscience and behavioral data to examine how sex differences in brain structure-indexed by gray matter volume (GMV)-and brain function-indexed by resting-state functional connectivity (RSFC)-relate to financial risk propensity (FRP) among full-time employees (N = 144; 72 females, 72 males). We found that the association between FRP and GMV in the left superior parietal lobule (SPL), a region involved in emotion regulation and numerical processing, was positive in females but negative in males. Additionally, only in females was lower FRP linked to stronger RSFC between the left SPL and the right hippocampus, a region critical for future-oriented thinking and memory. We also found a significant indirect effect of FRP on the relationship between RSFC and willingness to take risks in investment and career domains for females, but not for males. These findings suggest that in females, greater neural integration of emotional control, numerical reasoning, and prospection may support more cautious financial decisions. This research offers new insights into the neural basis of sex differences in financial decision-making and carries important theoretical and practical implications.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101079"},"PeriodicalIF":4.3,"publicationDate":"2025-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144500897","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Interpreting complex financial regulatory texts, such as the Basel III Accords, can be challenging even for human experts. In this paper, we explore the potential of Large Language Models (LLMs) to perform such tasks. Specifically, we evaluate reasoning strategies, namely Chain-of-Thought (CoT) and Tree-of-Thought (ToT), in their ability to assign accurate risk weights to test cases based on the Basel III Standardized Approach (SA) for Credit Risk. Moreover, we propose and test a guided learning-based few-shot variant of CoT and ToT using human expert input. By evaluating 6,501 test cases, comprised of diverse exposure scenarios, our results demonstrate that few-shot prompting with CoT as well as ToT significantly enhances the LLMs’ accuracy in inferring risk weights. For one-shot CoT, we observe gains of almost 13 percentage points in accuracy with GPT-4o, whereas Claude 3 Sonnet shows gains of more than 10 percentage points. Albeit smaller in magnitude, one-shot ToT improvements are around 9 percentage points.
{"title":"Reasoning with financial regulatory texts via Large Language Models","authors":"Bledar Fazlija , Meriton Ibraimi , Aynaz Forouzandeh , Arber Fazlija","doi":"10.1016/j.jbef.2025.101067","DOIUrl":"10.1016/j.jbef.2025.101067","url":null,"abstract":"<div><div>Interpreting complex financial regulatory texts, such as the Basel III Accords, can be challenging even for human experts. In this paper, we explore the potential of Large Language Models (LLMs) to perform such tasks. Specifically, we evaluate reasoning strategies, namely Chain-of-Thought (CoT) and Tree-of-Thought (ToT), in their ability to assign accurate risk weights to test cases based on the Basel III Standardized Approach (SA) for Credit Risk. Moreover, we propose and test a guided learning-based few-shot variant of CoT and ToT using human expert input. By evaluating 6,501 test cases, comprised of diverse exposure scenarios, our results demonstrate that few-shot prompting with CoT as well as ToT significantly enhances the LLMs’ accuracy in inferring risk weights. For one-shot CoT, we observe gains of almost 13 percentage points in accuracy with GPT-4o, whereas Claude 3 Sonnet shows gains of more than 10 percentage points. Albeit smaller in magnitude, one-shot ToT improvements are around 9 percentage points.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101067"},"PeriodicalIF":4.3,"publicationDate":"2025-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144511019","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-25DOI: 10.1016/j.jbef.2025.101078
Augustine Tarkom , Leiza Nochebuena-Evans , Haibo Wang
This paper examines how female Chief Financial Officers (CFOs) influence working capital management in U.S. public firms, documenting that female CFOs are associated with significantly lower working capital days compared to their male counterparts. Our analysis reveals several important conditions that enhance female CFOs’ effectiveness. We find that their effectiveness strengthens with greater board gender diversity, diverse international representation, and formal business education, suggesting complementary effects between female executive leadership and board composition. The effectiveness of female CFOs is more pronounced in firms with higher compensation levels and in environments characterized by lower market concentration, higher competitive threats, and broader firm scope. These effects are further amplified under stronger network connectivity, higher managerial ability, and co-opted boards, but independent of the specific committee or board roles held. Our findings remain robust to multiple endogeneity tests, including system GMM estimation, propensity score matching, entropy balancing, copula approaches. Our study contributes to the literature on gender in corporate finance by identifying working capital management as an important channel through which female executives enhance operational efficiency, while also highlighting the organizational and market conditions that amplify their effectiveness. Offering a business case for maintaining and strengthening diversity initiatives even in the face of social anti-activism pressures.
{"title":"The effectiveness of female chief financial officers in managing working capital: Evidence from US-listed firms","authors":"Augustine Tarkom , Leiza Nochebuena-Evans , Haibo Wang","doi":"10.1016/j.jbef.2025.101078","DOIUrl":"10.1016/j.jbef.2025.101078","url":null,"abstract":"<div><div>This paper examines how female Chief Financial Officers (CFOs) influence working capital management in U.S. public firms, documenting that female CFOs are associated with significantly lower working capital days compared to their male counterparts. Our analysis reveals several important conditions that enhance female CFOs’ effectiveness. We find that their effectiveness strengthens with greater board gender diversity, diverse international representation, and formal business education, suggesting complementary effects between female executive leadership and board composition. The effectiveness of female CFOs is more pronounced in firms with higher compensation levels and in environments characterized by lower market concentration, higher competitive threats, and broader firm scope. These effects are further amplified under stronger network connectivity, higher managerial ability, and co-opted boards, but independent of the specific committee or board roles held. Our findings remain robust to multiple endogeneity tests, including system GMM estimation, propensity score matching, entropy balancing, copula approaches. Our study contributes to the literature on gender in corporate finance by identifying working capital management as an important channel through which female executives enhance operational efficiency, while also highlighting the organizational and market conditions that amplify their effectiveness. Offering a business case for maintaining and strengthening diversity initiatives even in the face of social anti-activism pressures.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101078"},"PeriodicalIF":4.3,"publicationDate":"2025-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144500896","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-08DOI: 10.1016/j.jbef.2025.101077
Mordechai Ilan , Yevgeny Mugerman
This study examines how financial literacy influences mortgage selection, particularly the decision to link mortgages to the consumer price index (CPI). Using household-level data, we investigate the role of expected inflation, which should guide optimal mortgage choices. However, we find that low socioeconomic status (SES) borrowers disproportionately rely on current (easily available) inflation rather than inflation expectations. In contrast, financially literate borrowers—from higher SES groups—are better equipped to overcome cognitive biases and base their decisions on expected inflation. This divergence leads low-SES borrowers to systematically anchor their choices to current inflation, often resulting in suboptimal mortgage selection. A unique aspect of our setting is the absence of financial advisors, ensuring that observed decisions reflect borrowers’ own financial literacy and cognitive processing. Our findings emphasize the role of financial literacy in mitigating cognitive biases and promoting better financial decision-making. Expanding financial education initiatives could help low-SES borrowers make more informed mortgage choices, reducing costly selection errors and improving long-term financial stability.
{"title":"Misguided mortgage choices: Financial literacy, inflation expectations, and borrowing decisions","authors":"Mordechai Ilan , Yevgeny Mugerman","doi":"10.1016/j.jbef.2025.101077","DOIUrl":"10.1016/j.jbef.2025.101077","url":null,"abstract":"<div><div>This study examines how financial literacy influences mortgage selection, particularly the decision to link mortgages to the consumer price index (CPI). Using household-level data, we investigate the role of expected inflation, which should guide optimal mortgage choices. However, we find that low socioeconomic status (SES) borrowers disproportionately rely on current (easily available) inflation rather than inflation expectations. In contrast, financially literate borrowers—from higher SES groups—are better equipped to overcome cognitive biases and base their decisions on expected inflation. This divergence leads low-SES borrowers to systematically anchor their choices to current inflation, often resulting in suboptimal mortgage selection. A unique aspect of our setting is the absence of financial advisors, ensuring that observed decisions reflect borrowers’ own financial literacy and cognitive processing. Our findings emphasize the role of financial literacy in mitigating cognitive biases and promoting better financial decision-making. Expanding financial education initiatives could help low-SES borrowers make more informed mortgage choices, reducing costly selection errors and improving long-term financial stability.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"47 ","pages":"Article 101077"},"PeriodicalIF":4.3,"publicationDate":"2025-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144298116","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite growing recognition of female entrepreneurship, gender bias from investors continues to impede access to early-stage funding. As a countermeasure, female entrepreneurs often employ impression management (IM) techniques to shape investor perceptions and improve the prospects of funding. Yet, empirical investigations into the efficacy of such strategies remains nascent. This study examines the influence of IM on investor decision-making in the context of Indian female entrepreneurs. Employing an experimental design, 234 participants evaluated investment proposals online, yielding 694 notional investment decisions. Results from t-tests reveal a statistically significant bias against women entrepreneurs. However, findings also demonstrate IM strategies can attenuate this bias, particularly when coupled with favorable combinations of risk coverage and return potential. The study contributes to the literature on entrepreneurial finance and gender by offering evidence-based insights into the conditions under which IM may be most effective for females.
{"title":"Impression management by Indian female entrepreneurs: Mitigating investor bias in early-stage funding","authors":"Ashish Vazirani , Soumya Sarkar , Mayank Jyotsna Soni , Titas Bhattacharjee , Mousumi Singha Mahapatra","doi":"10.1016/j.jbef.2025.101064","DOIUrl":"10.1016/j.jbef.2025.101064","url":null,"abstract":"<div><div>Despite growing recognition of female entrepreneurship, gender bias from investors continues to impede access to early-stage funding. As a countermeasure, female entrepreneurs often employ impression management (IM) techniques to shape investor perceptions and improve the prospects of funding. Yet, empirical investigations into the efficacy of such strategies remains nascent. This study examines the influence of IM on investor decision-making in the context of Indian female entrepreneurs. Employing an experimental design, 234 participants evaluated investment proposals online, yielding 694 notional investment decisions. Results from t-tests reveal a statistically significant bias against women entrepreneurs. However, findings also demonstrate IM strategies can attenuate this bias, particularly when coupled with favorable combinations of risk coverage and return potential. The study contributes to the literature on entrepreneurial finance and gender by offering evidence-based insights into the conditions under which IM may be most effective for females.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"46 ","pages":"Article 101064"},"PeriodicalIF":4.3,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144178012","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01DOI: 10.1016/j.jbef.2025.101065
Monica Galizzi , Ashleigh Hillier , David Schena II
Autistic adults lead challenging economic lives. We explore a sample composed of both autistic and non-autistic individuals to evaluate determinants of financial risk tolerance in the two groups, and whether risk attitudes are associated with selected economic outcomes. We measure risk preference through different tools: an assessment of participants’ decisions when faced with hypothetical scenarios, two psychometric measures of individuals’ self-assessment of their risk tolerance, and one measure of observed actual risky behavior. Results indicate that autistic individuals are more risk averse across most financial risk preference measures even when we control for other co-existing conditions such as psychological disorders and learning disabilities. They lack understanding of the concept of risk diversification. Although autistic individuals are less likely to be employed or to make financial investments, higher-risk propensities increase the likelihood of such and other economic outcomes across both groups of individuals. Financial and economic curricula addressing financial risk must be tailored for individuals with developmental disabilities.
{"title":"Autistic adults, financial risk preference, and economic outcomes","authors":"Monica Galizzi , Ashleigh Hillier , David Schena II","doi":"10.1016/j.jbef.2025.101065","DOIUrl":"10.1016/j.jbef.2025.101065","url":null,"abstract":"<div><div>Autistic adults lead challenging economic lives. We explore a sample composed of both autistic and non-autistic individuals to evaluate determinants of financial risk tolerance in the two groups, and whether risk attitudes are associated with selected economic outcomes. We measure risk preference through different tools: an assessment of participants’ decisions when faced with hypothetical scenarios, two psychometric measures of individuals’ self-assessment of their risk tolerance, and one measure of observed actual risky behavior. Results indicate that autistic individuals are more risk averse across most financial risk preference measures even when we control for other co-existing conditions such as psychological disorders and learning disabilities. They lack understanding of the concept of risk diversification. Although autistic individuals are less likely to be employed or to make financial investments, higher-risk propensities increase the likelihood of such and other economic outcomes across both groups of individuals. Financial and economic curricula addressing financial risk must be tailored for individuals with developmental disabilities.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"46 ","pages":"Article 101065"},"PeriodicalIF":4.3,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144184597","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
By analyzing negative peer disclosures (NPDs) on Twitter, we provide evidence that crash risk decreases after tweeted firms are the subject of adverse peer tweets. NPDs also act as catalysts for companies to implement strategic changes, suggesting that managers are motivated to turn things around in response to negative tweets from their peers. Managers also take less risk and reduce financial statement opaqueness as a result. In scale and importance, the strategic change channel appears to be the main mechanism by which NPDs reduce stock price crashes. Moreover, in response to strategic shifts, auditors increase audit fees and analysts issue less optimistic earnings forecasts when they cover tweeted firms. Overall, our study illustrates the transformative effects of social media on product rivalry and market outcomes, and highlights NPDs as powerful tools for firm competition that hold managers accountable.
{"title":"Negative peer disclosures, crash risk, and strategic change","authors":"Scott Below , Oneil Harris , Charmaine Linton , Thanh Ngo","doi":"10.1016/j.jbef.2025.101063","DOIUrl":"10.1016/j.jbef.2025.101063","url":null,"abstract":"<div><div>By analyzing negative peer disclosures (NPDs) on Twitter, we provide evidence that crash risk decreases after tweeted firms are the subject of adverse peer tweets. NPDs also act as catalysts for companies to implement strategic changes, suggesting that managers are motivated to turn things around in response to negative tweets from their peers. Managers also take less risk and reduce financial statement opaqueness as a result. In scale and importance, the strategic change channel appears to be the main mechanism by which NPDs reduce stock price crashes. Moreover, in response to strategic shifts, auditors increase audit fees and analysts issue less optimistic earnings forecasts when they cover tweeted firms. Overall, our study illustrates the transformative effects of social media on product rivalry and market outcomes, and highlights NPDs as powerful tools for firm competition that hold managers accountable.</div></div>","PeriodicalId":47026,"journal":{"name":"Journal of Behavioral and Experimental Finance","volume":"46 ","pages":"Article 101063"},"PeriodicalIF":4.3,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144178010","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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