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Article
CEO DUALITY AND STOCK PRICE CRASH RISK: EVIDENCE FROM CHINA
Xiding Chen, Zhiqiang Ye, Zhibo Zhou, Fangfang Zhang
ABSTRACT. CEO duality motivates executives to boost financial performance and withhold unfavourable news, which increases future stock price crashes. Using China's listed firms from 2004 to 2014 as the sample, we present evidence CEO duality exerts positive effects on stock price crash risk. Moreover, the positive effect of CEO duality on crash risk is strengthened when the firms have relatively higher R&D expenditure, lower market competition, and lower analyst coverage.
KEYWORDS: CEO duality, crash risk, information asymmetry, Agency theory, China.