Can the Stability of Executive Team Contribute to the Stability of Financial Markets?A Study Based on the Risk of Corporate Stock Price Crash
This paper empirically examines the impact of executive team stability on firms'stock price crash risk using a sample of A-share listed companies in Shanghai and Shenzhen from 2007 to 2022.The research finds that the stronger the stability of the executive team,the lower the crash risk of a company's stock price.The mechanism test results show that a stable executive team can alleviate the firm's agency conflicts and resource constraints,which in turn reduces the risk of stock price crash.Heterogeneity analyses show that the effect of executive team stability on the risk of stock price crash is mainly found in firms with lower institutional investor ownership,weaker auditor oversight,and less analyst attention.It indicates that there is a substitute relationship between stable executive team and effective external governance in restraining the collapse of corporate stock prices.
Risk of Stock Price CrashStability of the Executive TeamAgent ConflictResource Constraint
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