Corporate strategic deviance and stock price volatility: from the perspective of information asymmetry

ABSTRACT

This study investigates the effect of corporate strategic deviance on stock price volatility based on the perspective of information asymmetry. We find that corporate strategy deviance significantly increases stock price volatility, and information asymmetry is the leading cause of this increasing effect. Furthermore, analyst coverage has played a role in alleviating information asymmetry which reduces the positive effect of strategic deviance on stock price volatility.

KEYWORDS:

• Strategy deviance
• stock price volatility
• information asymmetry
• analyst coverage

JEL CLASSIFICATION:

• G14
• G30
• G34

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This paper was supported by the National Natural Science Foundation of China (Grant Nos. 71972157, 71620107005, 71762032; Innovation and Intelligence Program for Higher Education Institutions of China (Grant No. B18043).