CFO overseas experience and stock price crash risk

Kai Tang and Yuxiang Cheng

Global Finance Journal, 2025, vol. 66, issue C

Abstract: As globalization continues to expand, cross-border personnel exchanges are increasing. This paper uses a two-way fixed effects model to empirically study the influence of CFO overseas experience on stock price crash risk (hereafter, crash risk) on the basis of a sample of 4235 listed firms in China's A-share market between 2003 and 2024. We find that CFOs with overseas experience possess greater expertise and skills, higher-order cognition, more effective cognitive structures, and lower overconfidence, which improve the company's investment returns and prevent the continuous accumulation of poor performance, thereby reducing crash risk. Our study suggests that continuing to implement the policy of attracting talent or managers with overseas experience will facilitate the stable development of the capital market. Furthermore, our study highlights that the CFO also plays a key role in a company's investment decisions.

Keywords: CFOs; Overseas experience; Stock price crash risk (search for similar items in EconPapers)
JEL-codes: G14 G34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:66:y:2025:i:c:s1044028325000559

DOI: 10.1016/j.gfj.2025.101128

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