Regional social capital and stock price crash risk: Evidence from the US

Mohammad Hendijani Zadeh

Finance Research Letters, 2023, vol. 51, issue C

Abstract: Using data from the US, we present empirical evidence for the causal influence of regional social capital on firms’ risk of future stock price crash. Specifically, we show that regional social capital is negatively related to firms’ risk of a future stock price crash. We also identify three potential channels (mediating factors) through which regional social capital can decrease the risk of a future stock price crash—the degree of private corporate news hiding, accounting conservatism, and excessive managerial risk-taking. The findings of our analyses indicate that companies located in high social capital areas tend to have lower degrees of private corporate news hiding or excessive managerial risk-taking, and higher degrees of firm-level accounting conservatism that lead to a lower risk of future stock price crash.

Keywords: Regional social capital; Stock price crash risk; Corporate news hiding; Accounting conservatism; Managerial risk-taking (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S154461232200602X
Full text for ScienceDirect subscribers only

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:finlet:v:51:y:2023:i:c:s154461232200602x

DOI: 10.1016/j.frl.2022.103425

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().