Alumni network, CEO turnover, and stock price crash risk: evidence from China

Jing Liu

Cogent Economics & Finance, 2022, vol. 10, issue 1, 2111813

Abstract: This paper empirically tests the impact of CEO’s alumni relationships on the stock price crash risk during CEO turnover. Empirical tests find that CEOs’ advantage among alumni networks will increase stock price crash risk during CEO turnover to some degree. However, this effect is built on the CEO’s power inside the firm that was established during the long tenure on the position. Further research finds that analysts’ following can exacerbate the release of bad news, however, it seems that the either internal corporate governance or external cannot effectively monitor the opportunistic behavior of CEOs on the whole. In addition, the positive effect of alumni network on stock price crash risk mainly exists in the regions where the legal environment is weak, that is, a sound legal environment can effectively prevent the opportunistic behavior of managers. Besides, the experience of the M.B.A program may strengthen the CEO’s tendency to take advantage of alumni connections to withhold bad news. This paper sheds light on the risk that social connection may bring and conducts to a more comprehensive understanding of the role that social network plays in business activities.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/23322039.2022.2111813 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oaefxx:v:10:y:2022:i:1:p:2111813

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/OAEF20

DOI: 10.1080/23322039.2022.2111813

Access Statistics for this article

Cogent Economics & Finance is currently edited by Steve Cook, Caroline Elliott, David McMillan, Duncan Watson and Xibin Zhang

More articles in Cogent Economics & Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().