Executive Tenure, Media Coverage And Stock Price Crash Risk

In the context of information asymmetry,executives hide bad news such as operating losses for self-interested purposes.When these bad news accumulates to managers who can not continue to hide,it will concentrate on the outbreak,leading to stock price collapse,thus bringing the risk of stock price collapse to enterprises.Therefore,the self-interested opportunistic behavior of executives is an important reason for the risk of stock price collapse.At the same time,due to the consideration of reputation and career,the opportunistic tendency of managers will be different at different stages of the term,so will the executive term affect the risk of stock price collapse?In addition,media reports,as a guiding tool for public opinion,can play an active role of information intermediary and external supervision,thus being able to constrain executives' self-interested opportunistic behavior.So,can media reports reduce the impact of executive tenure on the risk of stock price crashes?This paper selects the financial data,stock transaction data and media report data of China's Shanghai and Shenzhen A-share listed companies from 2002 to 2017 as the sample data of the study,and studies the dynamic impact of the term of the executives on the stock price collapse risk.Further,this paper also studies the governance mechanism of media reports on the term of executives and the risk of stock price collapse.The study found that the risk of stock price collapse in the early years of executives(the first three years)and the year before the departure of executives was higher.Based on the above research,the media has been introduced as a moderator.The study found that media reports have weakened the positive impact of executive tenure on the riskof stock price crash.The main contributions of this paper: First,this paper enriches the literature on the term of executives and the risk of stock price collapse.This paper divides the senior management term into different stages,and studies the influence of senior management on the risk of stock price collapse in different term of office.In order to improve the internal governance structure and external supervision mechanism,increase the management and supervision of senior management and reduce the senior management.Self-interested behavior,thereby reducing the risk of stock price collapse provides an empirical basis.Second,this paper enriches the literature on media governance effects of media reports.The media can limit the self-interested opportunistic behavior of executives by playing an active role of information intermediary and external supervision,thereby reducing the impact of executive tenure on the risk of stock price collapse.