CEO Behavioral Integrity and Stock Price Crash Risk:Based on the Mechanism Test of Bad News Hoarding by the Head of Subsidiaries
Integrity is both a moral principle and a leadership quality.This study conceptualizes integrity as behavioral integrity(BI)and empirically investigates the impact of CEO BI on the stock price crash risk of listed firms.The results reveal that CEO BI significantly mitigates the stock price crash risk.Based on the theoretical deductions and practical portrait that identify the head of subsidiaries as one of the main actors engaging in bad news hoard-ing behavior,the mechanism test indicates that CEO BI suppresses the bad news hoarding behavior by the head of subsidiaries through the governance mechanisms of constraining self-interest motivation,remedying institutional deficiencies and leading by example,ultimately reducing the stock price crash risk.The bad news hoarding behavior by the head of subsidiaries can adversely affect the CEO's career,revealing the motivation behind the CEO BI.Addi-tional analysis shows that the stabilizing effect of CEO BI on the stock price is more pronounced in firms with higher level of business decentralization and lower level of social credit in the regions where the head of subsidiaries operates.The findings remain robust after endogeneity test.This study expands the research on the factors influencing the stock price crash risk and the governance on the managerial agency problem,and also provides implications for pro-moting the social credit system.
Behavioral IntegrityStock Price Crash RiskHead of SubsidiariesBad News HoardingManagerial Agency Problem
万方数据
维普
