Locality stereotype, CEO trustworthiness and stock price crash risk: evidence from China
Exploring the locality stereotype with respect to CEO’s trustworthiness, we find that firms whose CEOs are from more reputable hometowns have a higher likelihood of stock price crashes, indicating the presence of a CEO "Trust Exploitation" effect, i.e. a high-trust identity does not guaran...
| Главные авторы: | ; ; |
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| Формат: | Электронный ресурс Статья |
| Язык: | Английский |
| Проверить наличие: | HBZ Gateway |
| Interlibrary Loan: | Interlibrary Loan for the Fachinformationsdienste (Specialized Information Services in Germany) |
| Опубликовано: |
2022
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| В: |
Journal of business ethics
Год: 2022, Том: 175, Выпуск: 4, Страницы: 773-797 |
| Другие ключевые слова: | B
Locality stereotype
B G32 B Aufsatz in Zeitschrift B G12 B CEO trustworthiness B G14 B Stock price crash risk B Z13 |
| Online-ссылка: |
Volltext (lizenzpflichtig) Volltext (lizenzpflichtig) |
| Итог: | Exploring the locality stereotype with respect to CEO’s trustworthiness, we find that firms whose CEOs are from more reputable hometowns have a higher likelihood of stock price crashes, indicating the presence of a CEO "Trust Exploitation" effect, i.e. a high-trust identity does not guarantee managerial ethics; to the contrary, it could tempt CEOs to abuse outsiders’ trust, camouflage their misconducts and conceal adverse information more severely. The effect of CEO’s perceived trustworthiness on tail risk of stock price remains robust when controlling for the region-level trust of firm’s headquarters, and in 2SLS regression with an instrumental variable. Further, CEO’s "Trust Exploitation" effect is more prominent among firms with lower disclosure quality, higher capital market pressure and higher CEO incentives. Our findings highlight an unexplored imperfection of individual-level trustworthiness as a reliable substitute for formal monitoring devices in terms of improving stock market stability. |
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| ISSN: | 1573-0697 |
| Второстепенные работы: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/s10551-020-04631-0 |
