The moderating role of board gender diversity on the relationship between firm opacity and stock returns

Harakeh, Mostafa; Leventis, Stergios; Masri, Tarek El; Tsileponis, Nikolaos

doi:10.1016/j.bar.2022.101145

Cited by 10 publications

(2 citation statements)

References 131 publications

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“…Empirical evidence shows that smaller board size and lack of independence significantly increase the crash risk of stock price (Hu et al, 2020; Hunjra et al, 2020; Dang & Nguyen, 2021; Wattanatorn and Padungsaksawasdi 2022). In contrast, a more diverse board, specifically in terms of gender, can decrease the risk of a stock price crash for a company (Harakeh et al, 2022; Jebran et al, 2020; Qayyum et al, 2021).…”

Section: Existing Literature and Study Hypothesesmentioning

confidence: 99%

Examining the interplay of sustainable development, corporate governance, and stock Price crash risk: Insights from ESG practices

Chebbi

2023

Sustainable Development

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Amidst the growing emphasis on sustainable development, there is an emerging trend of companies actively pursuing the transition towards sustainability. This shift is driven by various factors, including heightened societal scrutiny and a greater focus on environmental, social, and governance (ESG) considerations. As a result, companies are increasingly acknowledging the significance of incorporating sustainable practices into their operations to align with the expectations of the capital market. This paper investigates the association between ESG disclosures and stock price crash moderated by corporate governance (board size, independence, and gender diversity) for Saudi firms. Using a fixed effects regression method, we find that the coefficient of ESG is significant and negative (−0.0043 for NCSKEW and − 0.0006 for DUVOL) indicating a positive influence of ESG in diminishing stock price crash. The results also show that corporate governance positively and significantly moderate the ESG‐stock price crash risk. As additional analyses, we find a significant negative relationship between each aspect of ESG including social responsibility, environmental activities and governance practices and stock price crash risk. Moreover, the pandemic COVID‐19 has a dampening effect on the ESG‐stock price crash association. To ensure the validity of these conclusions, dynamic GMM models were employed to tackle any potential endogeneity issues, making the results even more robust. Our findings highlight that improving corporate sustainability positively impacts the stability of companies' stock prices. This study provides valuable insights and perspectives from the context of Saudi Arabia and offers theoretical and managerial implications that are relevant for policymakers and investors.

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Section: Existing Literature and Study Hypothesesmentioning

confidence: 99%

Examining the interplay of sustainable development, corporate governance, and stock Price crash risk: Insights from ESG practices

Chebbi

2023

Sustainable Development

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“…Kim et al ., 2016), board diversity (e.g. Harakeh et al ., 2022), auditor-client relationship (e.g. Callen and Fang, 2017), analyst coverage (e.g.…”

Section: Notesmentioning

confidence: 99%

How does management respond to stock price crashes?

Roy,

Marshall,

Nguyen

et al. 2023

IJMF

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PurposeThe purpose of this study is to investigate (1) how managers respond to stock price crashes, (2) why they respond and (3) how their responses affect shareholders.Design/methodology/approachThis study employs a panel regression with various firm-level controls and firm- and year-fixed effects. The sample is comprised of 101,532 firm-year observations with 11,727 unique firms from 1950 to 2019. Using mutual fund flow redemption pressure as an exogenous variable to stock price crashes, the paper provides further evidence of the causality of documented findings.FindingsManagement becomes more focused on improving transparency, raising investment efficiency, reducing agency conflicts and regaining the trust of shareholders by investing in social capital and employee welfare. These actions increase firm value. This study also suggests that management undertakes these actions out of concern for their tenure of employment.Originality/valueThe catalysts of stock price crashes are well documented, but much less is known about what happens following stock price crashes. This study provides more insights into the understanding of corporate crisis management practices following adverse events.

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The impact of entrepreneurial leadership and international explorative-exploitative learning on the performance of international new ventures

Zahoor,

Tarba,

Arslan

et al. 2023

Asia Pac J Manag

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The moderating role of board gender diversity on the relationship between firm opacity and stock returns

Cited by 10 publications

References 131 publications

Examining the interplay of sustainable development, corporate governance, and stock Price crash risk: Insights from ESG practices

Examining the interplay of sustainable development, corporate governance, and stock Price crash risk: Insights from ESG practices

How does management respond to stock price crashes?

The impact of entrepreneurial leadership and international explorative-exploitative learning on the performance of international new ventures

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