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Board diversity and stock price crash risk

Khalil Jebran, Shihua Chen and Ruibin Zhang

Research in International Business and Finance, 2020, vol. 51, issue C

Abstract: We show how board diversity influences stock price crash risk. By classifying board diversity into relation-oriented diversity (gender and age) and task-oriented diversity (tenure and education), we find that greater diversity on board can lower the risk of future stock crash. Additional analyses show that the effect of board diversity on future crash risk is stronger for firms with high information opacity and low institutional ownership. Overall, our findings provide new insights and suggest for more diverse boards to improve corporate governance practices.

Keywords: Board diversity; Stock price crash risk; Information opacity; Institutional ownership; China (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:51:y:2020:i:c:s0275531919308700

DOI: 10.1016/j.ribaf.2019.101122

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