Do executives run for the rain?Extreme rainfall and opportunistic stock selling behaviors of executives:Evidence from the weather level
The question of how extreme weather affects firms'internal governance and exec-utives'self-interested behavior is a key issue in exploring the microeconomic consequences of extreme weather.In this paper,we empirically examine the impact of extreme precipitation on executives'opportunistic stock selling behaviors using data matching weather conditions and listed firms in each prefecture-level city from 2010 to 2020.It is found that the occurrence of extreme precipitation leads to undervalued firms,reduced stock liquidity,and more severe fi-nancing constraints,and executives'opportunistic share reduction behavior is less rewarding and potentially more risky.Thus,extreme rainfall has a dampening effect on executives'opportunis-tic stock selling behaviors.Further research finds that the dampening effect is more pronounced in firms that are more geographically concentrated and have less media coverage.This paper expands the external governance mechanism of executives'opportunistic stock selling behavior from the perspective of extreme weather and further enriches the research boundary of the eco-nomic behavior of micro firms,which is of significance to the understanding of the economic consequences of extreme weather.
climate changeextreme rainfallstock selling of executives
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