Geopolitical risk, CEO war experience, and stock price crash risk: Evidence from Korea

Moonseok Choi, Seung Hun Han and Dongjoon Kim

Economics Letters, 2025, vol. 255, issue C

Abstract: This study examines the effect of the CEO war experience on the relationship between North Korea geopolitical risk (NKR) and stock price crash risk. Utilizing KOSPI and KOSDAQ listed firms expanding from 2011 to 2022, we find that the heightened NKR significantly increases firms' stock price crash risk. War-experienced CEOs decrease the stock price crash risk by voluntarily disclosing information to stakeholders, which supports the information transparency mechanism. Those results are consistent with several robustness tests.

Keywords: Geopolitical risk; North Korea’s threat; Stock market crash risk; Upper echelons theory; Information transparency mechanism (search for similar items in EconPapers)
JEL-codes: D81 G30 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003970

DOI: 10.1016/j.econlet.2025.112560

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