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Stock price crash risk: review of the empirical literature

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  • Ahsan Habib
  • Mostafa Monzur Hasan
  • Haiyan Jiang

Abstract

We survey the burgeoning literature on the determinants and consequences of firm‐specific future stock price crash risk. We synthesise a vast body of literature on the determinants of crash risk, identify weaknesses, and offer future research opportunities. We categorise the determinants into: (i) financial reporting and corporate disclosures, (ii) managerial incentives and managerial characteristics, (iii) capital market transactions, (iv) corporate governance mechanisms, and (v) informal institutional mechanisms. Despite a large body of research into the determinants of crash risk, very little research attention has been directed towards understanding the consequences of stock price crash.

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  • Ahsan Habib & Mostafa Monzur Hasan & Haiyan Jiang, 2018. "Stock price crash risk: review of the empirical literature," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(S1), pages 211-251, November.
    • Handle: RePEc:bla:acctfi:v:58:y:2018:i:s1:p:211-251
    DOI: 10.1111/acfi.12278
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