IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v96y2024ipas1057521924004861.html
   My bibliography  Save this article

Do managers have more incentives to hoard bad news during panic? A study of terrorist attacks and stock price crash risk

Author

Listed:
  • Liu, Xianda
  • Wei, Zi
  • Zhao, Sheng

Abstract

We identify a robust and significant relationship, both statistically and economically, between the rise in a firm's stock price crash risk and the occurrence of terrorist attacks in the vicinity of the firm's headquarters. The empirical findings support the idea that terrorist attacks often trigger increased performance pressures and elevated investor sensitivities, thereby initiating the information manipulation activities of firm managers. Additionally, we examine the heterogeneous effects of corporate governance quality and firm transparency, indicating that firms with superior corporate governance and transparency are less vulnerable to the impact of terrorist attacks. We offer insights into the economic consequences of managerial behavior responses because of the traumatic shock of terrorist attacks.

Suggested Citation

  • Liu, Xianda & Wei, Zi & Zhao, Sheng, 2024. "Do managers have more incentives to hoard bad news during panic? A study of terrorist attacks and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924004861
    DOI: 10.1016/j.irfa.2024.103554
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521924004861
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2024.103554?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924004861. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.