This study documents a puzzling historical trend in crash risk for US-listed firms: between 1950 and 2019, the firm-year occurrences of idiosyncratic stock price crashes rose from 5.5% to an astonishing 27%. The vastness literature notoriously attributes agency reasons, i.e. self-interested executives who strategically camouflage bad news via financial reporting opacity overinvestment channels....

This study investigates whether and how financial constraints on firms affect the risk of their stock price crashing. We find strong evidence that increase future crash risk. finding is robust to using two quasi-natural experiments control for potential endogeneity. also provide suggest bad news hoarding default explain financially constrained firms. Cross-sectional analysis reveals positive re...

Stock price has been found to provide important information about future economic activities. Fama (1981), Fischer and Merton (1984), and Barro (1990), among many others, document a positive relation between stock market return and subsequent growth in investment and output. These findings are consistent with rational expectations asset pricing models, in which stock price is equal to the sum o...

Our research focuses on the relationship between ESG performance of South Korean multinational companies and stock price crash in next year. For our study, we divide samples into three different categories - namely, all companies, (MNC) non-multinational companies(non-MNC). major findings are as following. First, find negative social (S) score future crash, indicating that their prevents risk. ...

We propose a non linear Langevin equation as a model for stock market fluctuations and crashes. This equation is based on an identification of the different processes influencing the demand and supply, and their mathematical transcription. We emphasize the importance of feedback effects of price variations onto themselves. Risk aversion, in particular, leads to an ‘up-down’ symmetry breaking te...

This paper provides direct evidence of leverage-induced re sales leading to a major stock market crash. Our analysis uses proprietary account-level trading data for brokerageand shadownanced margin accounts during the Chinese stock market crash in the summer of 2015. We nd that margin investors heavily sell their holdings when their account-level leverage edges toward their maximum leverage lim...