CEO Tenure and Stock Price Crash Risk

Abstract

This article explores the impact of CEO tenure on the risk of a company’s stock price crash Past research has found that CEOs in the early tenure are eager to perform positively and have a strong incentive to inflate the company's stock price to show their abilities to the market and tend to increase the degree of earnings management to highlight its own operating results Based on this this study expects that CEOs at the beginning of their tenure tend to hide the bad news of the company but when the information accumulates and cannot be hidden the negative news is revealed in the market causing the risk of future stock price crash Taking the Taiwanese listed companies from 2012 to 2018 as a sample the empirical results found that the shorter the CEO's tenure the higher the risk of the company's stock price crash; overall the results of the study confirmed that the CEO's term has an significant role in the company's disclosure policy and shareholders' wealth changes

Date of Award	2020
Original language	English
Supervisor	Ting-Kai Chou (Supervisor)