The association between political connection and stock price crash risk: Using financial reporting quality as a moderator

Tzu-Yi Fang, Fengyi Lin, Sheng-Wei Lin and Yi-Hua Huang

Finance Research Letters, 2020, vol. 34, issue C

Abstract: •This paper examines how political connections (PCs) can exacerbate the managerial hoarding of negative news and subsequently affect the risk appertaining to a stock price crash.•The present study also extends recent research on the PCs–financial reporting connection through an evaluation of said risk.•Compared with other types of risk, crash risk uniquely has a direct economic impact on investors. Thus, investors seeking to make investment decisions and manage their risks must understand the crash risk.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:34:y:2020:i:c:s1544612319302715

DOI: 10.1016/j.frl.2019.08.015

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