Common institutional ownership and stock price crash risk

• 成果类型: Article
• 署名作者: Chen, Shenglan; Ma, Hui; Wu, Qiang; Zhang, Hao
• 署名单位: Zhejiang University of Technology; Zhejiang University of Technology; Shanghai University of Finance & Economics; Hong Kong Polytechnic University; Rochester Institute of Technology; Rochester Institute of Technology
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12915
• 发表日期: 2024
• 页码: 679-711
• 关键词: product market competition; research-and-development; corporate governance; DISCLOSURE POLICY; INFORMATION; liquidity; investors; earnings; externalities; COMPENSATION

摘要

This paper presents new evidence on the economic benefits arising from common institutional ownership. We find a negative and significant effect of common institutional ownership on stock price crash risk. This effect is robust to a battery of robustness checks and is causal according to some identification tests, including difference-in-differences analyses on financial institution mergers. We find evidence that the negative effect is attributable to the monitoring role of common institutional owners-a role that is enabled by common owners' lower information processing cost and greater monitoring incentives owing to governance externalities. We also find that common owners negatively influence crash risk through constraining bad news hoarding and that common owners are more likely to force CEO turnover when a firm has higher crash risk. Overall, our results suggest that common institutional shareholders play a unique and effective monitoring role that fends off stock price crashes. Propriete institutionnelle commune et risque d'effondrement du cours des actionsCette etude presente de nouvelles donnees probantes concernant les avantages economiques associes a la propriete institutionnelle commune. Nous mettons au jour un effet negatif important de la propriete institutionnelle commune sur le risque d'effondrement du cours des actions. Cet effet persiste a la suite d'une serie de verifications de la robustesse, et il est determinant selon certains tests d'identification, dont des analyses de l'ecart dans les differences portant sur des fusions d'institutions financieres. Nous degageons des donnees probantes indiquant que cet effet negatif est attribuable au role de surveillance des proprietaires institutionnels communs - un role rendu possible par le cout de traitement de l'information moins eleve et des incitatifs plus importants aux fins de la surveillance pour ces proprietaires. Nous etablissons egalement que les proprietaires communs influencent negativement les risques d'effondrement en limitant l'accumulation de mauvaises nouvelles et qu'ils sont plus susceptibles d'imposer le remplacement du PDG lorsqu'une societe presente un risque d'effondrement eleve. Dans l'ensemble, nos resultats portent a croire que les actionnaires institutionnels communs jouent un role de surveillance unique et efficace qui ecarte les effondrements du prix des actions.