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Managerial overconfidence and stock price crash risk

Author

Listed:
  • Han, Huanfa
  • Liu, Cuiping
  • Li, Jing

Abstract

This study explores the effect of managerial overconfidence on the risk of a stock price crash. Results indicate that managerial overconfidence positively affects stock price crash risk. Importantly, internal controls can reduce this risk by curbing managerial overconfidence.

Suggested Citation

  • Han, Huanfa & Liu, Cuiping & Li, Jing, 2024. "Managerial overconfidence and stock price crash risk," Finance Research Letters, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324005488
    DOI: 10.1016/j.frl.2024.105518
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    References listed on IDEAS

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    1. Mehdi Safari Gerayli & Mohammadreza Abdoli & Hasan Valiyan & Ali Damavandi, 2021. "Managerial overconfidence and internal control weaknesses: evidence from Iranian firms," Accounting Research Journal, Emerald Group Publishing Limited, vol. 34(5), pages 475-487, March.
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    More about this item

    Keywords

    Managerial overconfidence; Stock price crash risk; Internal controls; Mediating effects;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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