 Can reputation concern restrain bad news hoarding in family firms?Fuxiu Jiang, Xinni Cai, John R. Nofsinger and Xiaojia Zheng Journal of Banking & Finance, 2020, vol. 114, issue C Abstract: Family involvement as chair of the board combines the reputation of the controlling family and the firm. Thus, the family's incentive to prevent reputation loss acts as a corporate governance mechanism in mitigating self-serving and bad news hoarding behavior of family firms. We find a lower future stock price crash risk in family firms with family related chairman, compared with family firms with non-family related chairman. The impact of family related chairman is more pronounced in firms with weaker external monitoring and more severe financial distress, and when families have greater reputation concern. Additionally, we find family-chair firms conduct more bad news forecasting, less tunneling behavior, higher earnings quality, as well as have lower costs of equity and overall better performance in the future. The family CEO has little impact on future stock price crash risk. Keywords: Reputation; Board chair; Family firm; Stock price crash risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:114:y:2020:i:c:s0378426620300753 DOI: 10.1016/j.jbankfin.2020.105808 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.