Corporate Accessibility and Stock Price Crash Risk

Michael FIRTH; Sonia Man-lai WONG; Xiaofeng ZHAO

Corporate Accessibility and Stock Price Crash Risk

Michael FIRTH, Sonia Man-lai WONG, Xiaofeng ZHAO

Lingnan University

Research output: Other Conference Contributions › Conference Paper (other) › Other Conference Paper

Abstract

We examine whether accessibility to outside market participants can mitigate stock price crash risks in a weak public information environment. We measure accessibility on the basis of outside investors’ attempts to communicate with listed firms via public communication channels (e.g., telephones, e-mail, and online forums) in China. We find that accessible firms face lower crash risks than inaccessible firms, and the effect increases with public disclosure opacity. Accessible firms have more private meetings with outside investors and the effect of accessibility increases when the meetings contents are disclosed. Finally, accessible firms accumulate less negative corporate information than inaccessible firms.

Original language	English
Publication status	Published - 16 Aug 2019
Event	2019 Greater Bay Area Summer Finance Conference - Hong Kong University of Science and Technology, Hong Kong, Hong Kong Duration: 15 Aug 2019 → 16 Aug 2019 http://w3.bm.ust.hk/fina/gba/index.html

Conference

Conference	2019 Greater Bay Area Summer Finance Conference
Country/Territory	Hong Kong
City	Hong Kong
Period	15/08/19 → 16/08/19
Internet address	http://w3.bm.ust.hk/fina/gba/index.html

Bibliographical note

This manuscript is dedicated to Michael Firth, who passed away in August 2016. While working on revisions to this manuscript, he enlightened us with his wisdom about life and his brilliant understanding of financial and accounting
economics, which was important for the eventual completion of this work.

We are grateful to Ferdinand Gul, K. Philip Wang, Baohui Zhang, Chen Lin, Dan Li, Guanming He, Li Guo, and seminar participants at FMA (European), FMA (Annual), CICF, Shanghai JiaoTong University, and Chinese University of Hong Kong, for their comments. Wong thanks the Government of the Hong Kong Special
Administrative Region of PRC for funding support (GRF LU391113).

Keywords

Corporate Accessibility
Private information acquisition
Stock price crash risk
China

Access to Document

http://w3.bm.ust.hk/fina/gba/Program/SessionV/Firth,%20Wong,%20and%20Zhao%20(2019).pdf

Investor Relations and Corporate Transparency in China
WONG, M. L. S. (PI) & FIRTH, M. A. (CoI)
Research Grants Council (HKSAR)
1/01/14 → 31/12/16
Project: Grant Research

Cite this

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title = "Corporate Accessibility and Stock Price Crash Risk",

abstract = "We examine whether accessibility to outside market participants can mitigate stock price crash risks in a weak public information environment. We measure accessibility on the basis of outside investors{\textquoteright} attempts to communicate with listed firms via public communication channels (e.g., telephones, e-mail, and online forums) in China. We find that accessible firms face lower crash risks than inaccessible firms, and the effect increases with public disclosure opacity. Accessible firms have more private meetings with outside investors and the effect of accessibility increases when the meetings contents are disclosed. Finally, accessible firms accumulate less negative corporate information than inaccessible firms. ",

keywords = "Corporate Accessibility, Private information acquisition, Stock price crash risk, China",

author = "Michael FIRTH and WONG, {Sonia Man-lai} and Xiaofeng ZHAO",

note = "This manuscript is dedicated to Michael Firth, who passed away in August 2016. While working on revisions to this manuscript, he enlightened us with his wisdom about life and his brilliant understanding of financial and accounting economics, which was important for the eventual completion of this work. We are grateful to Ferdinand Gul, K. Philip Wang, Baohui Zhang, Chen Lin, Dan Li, Guanming He, Li Guo, and seminar participants at FMA (European), FMA (Annual), CICF, Shanghai JiaoTong University, and Chinese University of Hong Kong, for their comments. Wong thanks the Government of the Hong Kong Special Administrative Region of PRC for funding support (GRF LU391113). ; 2019 Greater Bay Area Summer Finance Conference ; Conference date: 15-08-2019 Through 16-08-2019",

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AU - FIRTH, Michael

AU - WONG, Sonia Man-lai

AU - ZHAO, Xiaofeng

N1 - This manuscript is dedicated to Michael Firth, who passed away in August 2016. While working on revisions to this manuscript, he enlightened us with his wisdom about life and his brilliant understanding of financial and accounting economics, which was important for the eventual completion of this work. We are grateful to Ferdinand Gul, K. Philip Wang, Baohui Zhang, Chen Lin, Dan Li, Guanming He, Li Guo, and seminar participants at FMA (European), FMA (Annual), CICF, Shanghai JiaoTong University, and Chinese University of Hong Kong, for their comments. Wong thanks the Government of the Hong Kong Special Administrative Region of PRC for funding support (GRF LU391113).

PY - 2019/8/16

Y1 - 2019/8/16

N2 - We examine whether accessibility to outside market participants can mitigate stock price crash risks in a weak public information environment. We measure accessibility on the basis of outside investors’ attempts to communicate with listed firms via public communication channels (e.g., telephones, e-mail, and online forums) in China. We find that accessible firms face lower crash risks than inaccessible firms, and the effect increases with public disclosure opacity. Accessible firms have more private meetings with outside investors and the effect of accessibility increases when the meetings contents are disclosed. Finally, accessible firms accumulate less negative corporate information than inaccessible firms.

AB - We examine whether accessibility to outside market participants can mitigate stock price crash risks in a weak public information environment. We measure accessibility on the basis of outside investors’ attempts to communicate with listed firms via public communication channels (e.g., telephones, e-mail, and online forums) in China. We find that accessible firms face lower crash risks than inaccessible firms, and the effect increases with public disclosure opacity. Accessible firms have more private meetings with outside investors and the effect of accessibility increases when the meetings contents are disclosed. Finally, accessible firms accumulate less negative corporate information than inaccessible firms.

KW - Corporate Accessibility

KW - Private information acquisition

KW - Stock price crash risk

KW - China

M3 - Conference Paper (other)

T2 - 2019 Greater Bay Area Summer Finance Conference

Y2 - 15 August 2019 through 16 August 2019

ER -

Corporate Accessibility and Stock Price Crash Risk

Abstract

Conference

Bibliographical note

Keywords

Access to Document

Projects

Investor Relations and Corporate Transparency in China

Cite this