EconPapers    
Economics at your fingertips  
 

M&A compensation commitment and stock price crash risk: evidence from China

Chenyu Zhang, Ju Mao and Xinshu Mao

Asia-Pacific Journal of Accounting & Economics, 2024, vol. 31, issue 5, 757-787

Abstract: This paper examines the effect of M&A compensation commitment on stock price crash risk using the setting of Chinese M&As that committed performance has been achieved during the commitment period. We observe an increase in stock price crash risk after the expiration of M&A compensation commitment, and the effect is more significant in companies whose committed performance precise completion. Further analyses show that the ex post stock price crash risk is more strengthened in companies with higher agency conflicts and SOEs, but the external governance roles, Big-4 auditors and analysts, can weaken this effect. The channel analysis shows that the bad news is that goodwill impairment loss after the expiration of the commitment period is released, leading to an increasing stock price crash risk. Overall, our finding shows that M&A compensation commitment has an ex post effect on stock price crash risk.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/16081625.2022.2157291 (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:raaexx:v:31:y:2024:i:5:p:757-787

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/raae20

DOI: 10.1080/16081625.2022.2157291

Access Statistics for this article

Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

More articles in Asia-Pacific Journal of Accounting & Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2025-03-20
Handle: RePEc:taf:raaexx:v:31:y:2024:i:5:p:757-787