Executives with Economic Management Education Backgrounds and Stock Price Crash Risk: Evidence from Chinese A-share Markets

Zhaolan Wang, Ziqin Xie and Chen Chen

Emerging Markets Finance and Trade, 2022, vol. 58, issue 10, 2764-2782

Abstract: This paper sheds light on the impact of executives’ backgrounds on their firms’ stock price crash risk. Specifically, it finds that hiring executives with economic management education backgrounds can significantly increase firms’ stock price crash risk. Robustness and endogeneity tests confirm this finding. Further analysis reveals that the observed impact is greatest for non-state-owned firms, firms with low management shareholding ratios, and firms facing performance pressure. Hiring chairmen with economic management education backgrounds will carries a higher risk of a share-price crash. These findings enhance understanding of the formation of and factors influencing stock price crash risk.

Date: 2022
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DOI: 10.1080/1540496X.2021.2009798

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