Individualistic cultures and crash risk
| Autor: | Robert W. Faff, Lily Nguyen, Hoang Luong, Tung Lam Dang |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
040101 forestry
050208 finance Individualistic culture media_common.quotation_subject 05 social sciences Crash risk Sample (statistics) 04 agricultural and veterinary sciences Individualism Earnings management Accounting 0502 economics and business Economics 0401 agriculture forestry and fisheries Hofstede's cultural dimensions theory Demographic economics human activities General Economics Econometrics and Finance Welfare media_common Overconfidence effect |
| Zdroj: | European Financial Management. 25:622-654 |
| ISSN: | 1468-036X 1354-7798 |
| DOI: | 10.1111/eufm.12180 |
| Popis: | This study examines whether individualistic national culture is associated with stock price crash risk (‘crash risk’) for a sample of firms from 36 countries over the period of 1990–2015. We find robust evidence that firms in more individualistic cultural settings exhibit higher future crash risk. Digging deeper, we find that earnings management, excessive managerial risk‐taking, and investors’ difference of opinion and overconfidence are all possible explanations for the positive effect of individualism on crash risk. Overall, our findings suggest that individualism, as a key cultural dimension, has an important impact on investor welfare, manifested through crash risk. |
| Databáze: | OpenAIRE |
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