CEO power and stock price crash risk in China: do female directors’ critical mass and ownership structure matter?
CEO power and stock price crash risk in China: do female directors’ critical mass and ownership structure matter?
This study investigates how CEO power is associated with stock price crash risk. We further examine the moderating roles of female directors’ critical mass and ownership structure on the relationship between CEO power and stock price crash risk. Employing one of the largest datasets to-date of Chinese listed firms over the 2005-2015 period (13,421 firm-year observations), we find that CEO’s power to increase the likelihood of stock price crash risk is significantly mitigated when the percentage of: (a) female directors; and (b) ownership by blockholders and institutions, is high within firms. We interpret our findings within a theoretical framework that draws insights from neo-institutional, managerial power and critical mass theories. The findings are robust to the use of alternative measures, estimation methods and endogeneity issues.
CEO power, China, Female director critical mass, Managerial power theory, Ownership structure, Stock price crash risk
1-19
Shahab, Yasir
b47bf26f-bd24-48c8-beaf-5c6849bf10c2
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Ullah, Farid
aeee2696-d071-4526-a3ae-3c6e8054dd09
Yugang, Chen
530e9f19-35b1-497b-8874-c38fc38ded8f
Ye, Zhiwei
e8e56013-efea-4de3-90fd-e003ecb358f5
March 2020
Shahab, Yasir
b47bf26f-bd24-48c8-beaf-5c6849bf10c2
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Ullah, Farid
aeee2696-d071-4526-a3ae-3c6e8054dd09
Yugang, Chen
530e9f19-35b1-497b-8874-c38fc38ded8f
Ye, Zhiwei
e8e56013-efea-4de3-90fd-e003ecb358f5
Shahab, Yasir, Ntim, Collins, Ullah, Farid, Yugang, Chen and Ye, Zhiwei
(2020)
CEO power and stock price crash risk in China: do female directors’ critical mass and ownership structure matter?
International Review of Financial Analysis, 68, , [101457].
(doi:10.1016/j.irfa.2020.101457).
Abstract
This study investigates how CEO power is associated with stock price crash risk. We further examine the moderating roles of female directors’ critical mass and ownership structure on the relationship between CEO power and stock price crash risk. Employing one of the largest datasets to-date of Chinese listed firms over the 2005-2015 period (13,421 firm-year observations), we find that CEO’s power to increase the likelihood of stock price crash risk is significantly mitigated when the percentage of: (a) female directors; and (b) ownership by blockholders and institutions, is high within firms. We interpret our findings within a theoretical framework that draws insights from neo-institutional, managerial power and critical mass theories. The findings are robust to the use of alternative measures, estimation methods and endogeneity issues.
Text
Accepted_Manuscript_14_January_2020
- Accepted Manuscript
More information
Accepted/In Press date: 14 January 2020
e-pub ahead of print date: 17 January 2020
Published date: March 2020
Additional Information:
Funding Information:
This research was funded by the “Funds for High-Level Talents” of Xijing University (2019), Grant/Award Number: XJ19B02 .
Publisher Copyright:
© 2020
Keywords:
CEO power, China, Female director critical mass, Managerial power theory, Ownership structure, Stock price crash risk
Identifiers
Local EPrints ID: 437003
URI: http://eprints.soton.ac.uk/id/eprint/437003
ISSN: 1057-5219
PURE UUID: 6d3bbe5d-9444-48bc-8ea8-c521ea75a442
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Date deposited: 15 Jan 2020 17:30
Last modified: 17 Mar 2024 05:14
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Contributors
Author:
Yasir Shahab
Author:
Farid Ullah
Author:
Chen Yugang
Author:
Zhiwei Ye
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