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CFO cultural background and stock price crash risk
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Fu, Xi and Zhang, Zhifang (2019) CFO cultural background and stock price crash risk. Journal of International Financial Markets, Institutions and Money, 62 . pp. 74-93. doi:10.1016/j.intfin.2019.05.001
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WRAP-CFO-cultural-background-stock-price-crashrisk-Zhang-2019.pdf - Accepted Version - Requires a PDF viewer. Available under License Creative Commons Attribution Non-commercial No Derivatives 4.0. Download (960Kb) | Preview |
Official URL: http://dx.doi.org/10.1016/j.intfin.2019.05.001
Abstract
We investigate the relation between the cultural background of chief financial officers (CFOs) and stock price crash risk. Using a novel single-country setting in the U.K. market, we find robust evidence that CFOs from cultural backgrounds that emphasise uncertainty avoidance are negatively associated with firms’ stock price crash risk. Our evidence further shows that the effect of CFO uncertainty avoidance is more pronounced for firms with higher information asymmetry and riskiness, and when CFOs have a greater ability to influence firm decisions. Overall, the results shed light on the important role of CFO cultural background for firm policies and outcomes.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HG Finance | ||||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Chief financial officers , Corporations -- Finance -- Management, Chief financial officers -- Training of , Leadership , Business enterprises -- Finance -- Management, Stock price forecasting , Stocks -- Prices , Financial crises | ||||||||
| Journal or Publication Title: | Journal of International Financial Markets, Institutions and Money | ||||||||
| Publisher: | Elsevier BV | ||||||||
| ISSN: | 1042-4431 | ||||||||
| Official Date: | September 2019 | ||||||||
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| Volume: | 62 | ||||||||
| Page Range: | pp. 74-93 | ||||||||
| DOI: | 10.1016/j.intfin.2019.05.001 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| RIOXX Funder/Project Grant: |
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