Top management team stability and stock price crash risk: Evidence from China

Bofu Deng, Zhenge Peng, Kam C. Chan and Hongce Chen

International Review of Financial Analysis, 2025, vol. 102, issue C

Abstract: We empirically examine the association between top management team stability and stock price crash risk. Using a sample of Chinese listed companies for 2007–2021, we find that top management team stability has a negative effect on stock price crash risk. Mechanism tests show that this effect operates through reducing business risk, agency costs and improving information quality. Additional analysis reveals that this relationship is more pronounced in companies audited by non-Big Four firms and those with high executive shareholding. Our study integrates the characteristics of internal human capital teams with capital market information efficiency, offering a novel contribution to the literature on stock price crash risk.

Keywords: Top management team stability; Management characteristics; Information quality; Stock price crash risk (search for similar items in EconPapers)
JEL-codes: G34 M41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:102:y:2025:i:c:s1057521925002133

DOI: 10.1016/j.irfa.2025.104126

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