Heterogeneous political connections and stock price crash risk: Evidence from Malaysia

Chwee Ming Tee, Mei Yee Lee and Abdul Majid

Journal of Behavioral and Experimental Finance, 2021, vol. 31, issue C

Abstract: This study examines whether the withholding of bad news from shareholders by managers is influenced by the different types of political connections that a firm may have. Specifically, we investigate whether the length of political connections, different types of ownership structures of politically connected firms, and different kinds of political ties have similar effects on stock price crash risk. Based on an analysis of a comprehensive Malaysian dataset of public listed firms for the period 2007 to 2016, our results show that older politically connected firms, government-linked companies and firms connected through shareholders to important politicians have greater stock price crash risk. The management suppressing negative information from other shareholders differs according to different types of political connections.

Keywords: Heterogeneous political connections; Stock price crash risk; Length of political connections; Government-linked companies; Political ties; Information withholding (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214635021000964

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:31:y:2021:i:c:s2214635021000964

DOI: 10.1016/j.jbef.2021.100552

Access Statistics for this article

Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber

More articles in Journal of Behavioral and Experimental Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().