An Empirical Study Of The Impact Of Executive Tenure On The Stock Price Crash Risk

Since the establishment of the Shenzhen Stock Exchange and the Shanghai Stock Exchange in China,the phenomenon of stock prices crash of listed companies has occurred frequently,which has seriously disrupted the healthy and sustainable development of the capital market,and also endangered the interests of investors.The capital market has caused widespread concern among national policy-making institutions,investors,and academics.The current research on the risk of stock price crash is mainly based on the theory of information asymmetry.The research results show that the management of the company hides the bad news of the company for its own benefit and accumulates it to a threshold,then releases it and causes the stock price crash.Therefore,the self-interest behavior of the executives is an important reason for the stock market crash of the company.However,the existing research mainly focuses on the impact of company characteristics on the risk of stock price crash.Few scholars have studied the impact of executive tenure on the risk of stock price crashes from the perspective of self-interest of executive reputation and career concerns.At the same time,there are differences in salary incentives,earnings management,corporate performance and risk management in different stages of the executive's tenure,That is to say,the opportunism tendency is different at different stages of the executive's tenure.So will the different stages of theexecutive's tenure affect the risk of the company's stock price crash?This paper explores the relevant theories about the risk of stock price crashes at home and abroad,selects the relevant data of A-share listed companies from 2012 to 2017,and uses a combination of normative research and empirical research to explore the different stages of senior management tenure.Whether there will be a significant difference in the risk of stock price crashes,and consider the impact of corporate performance on the relationship between the two.Through empirical tests,this article draws the following research conclusions:(1)The risk of a company's stock price crash in the first year of senior management's tenure has decreased significantly.(2)The risk of a company's stock price collapse during the initial period of service(second and third years of service)and at the end of service(one year before departure)has increased significantly.(3)Among the companies with poor corporate performance,the negative correlation between the first year of senior executive service and the risk of stock price crash is more significant,and the positive correlation between the early executive tenure and the end of senior management and the risk of stock market crash is more significant.These studies enrich the research literature on the risk of stock market crashes from the perspective of the tenure of senior executives.At the same time,they divide the tenure of senior executives into several stages to study the changes in the risk of stock market crashes in different stagesof senior executives.This is to improve the company's governance mechanism and reduce Senior executives' self-interest behavior and reducing the risk of corporate stock price crashes provide empirical evidence.