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

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.

KEYWORDS:

• Economic management education background
• stock price crash risk
• accounting information quality
• information manipulation
• executives

Disclosure statement

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