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Individualism and stock price crash risk

Zhe An (), Zhian Chen (), Donghui Li () and Lu Xing ()
Additional contact information
Zhe An: Monash University
Zhian Chen: University of New South Wales
Donghui Li: Jinan University
Lu Xing: University of Glasgow

Journal of International Business Studies, 2018, vol. 49, issue 9, 1208-1236

Abstract: Abstract Employing a sample of 26,473 firms across 42 countries from 1990 to 2013, we find that firms located in countries with higher individualism have higher stock price crash risk. Furthermore, individualism can be transmitted by foreign investors from overseas markets to influence local firms’ crash risk, and can exacerbate the impact of firm risk taking and earnings management on crash risk. Moreover, the positive relation between individualism and crash risk is amplified during the global financial crisis and attenuated by enhanced country-level financial information transparency and the adoption of International Financial Reporting Standards.

Keywords: cross-country study; national culture; individualism; stock price crash risk (search for similar items in EconPapers)
Date: 2018
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