拉斯维加斯9888

Finance Seminar（2014-17）

Topic:Product Market Threats and Stock Crash Risk

Speaker:Si Li, Wilfrid Laurier University

Time:Wednesday, 18 June, 10:00-11:30

Location:Room K01, Guanghua Building 2

Abstract：This paper examines the effect of product market threats on firms’ stock price crash risk. Using fluidity as the main measure of the product market threats, our regressions find that firms facing more threats from the product market are more prone to stock price crash. This result is further confirmed by an IV analysis and a difference-in-difference analysis with exogenous shock to market competition. Our results are consistent with the following view: competitive pressure from the product market may cause a firm to hide material bad information. Such information concealing behavior engenders stock price crashes when the bad information cannot be hided and finally becomes public.