| Stock price collapse refers to the risk of a sudden sharp decline in market indices and individual stock prices,which is an extreme manifestation of changes in stock prices.The stock price crash affects the rights and interests of shareholders,weakens investors’ confidence in the financial market,is not conducive to the stable and healthy development of the financial market,and even causes a misal location of resources and endangers the development of the real economy.The main factor leading to the risk of collapse is the manipulation of corporate information by insiders,the concealment of bad news by executives,the exaggeration of company performance or the whitewashing of bad performance,resulting in information asymmetry between investors and insiders of the enterprise,so that when the accumulation of bad news reaches the upper limit of capacity and is released centrally,it will cause a huge negative impact on the enterprise or even a stock price crash.The CEO is the highest administrative officer in the company who manages the development of the enterprise,which plays a vital role in the sound development of China’s listed companies.The CEO is the main formulator of the company’s development strategy and development strategy,and assumes many responsibilities for the development of the enterprise.One of the most important functions of the board of directors is to supervise the management of the company on behalf of shareholders,and the performance of this function is often influenced by the relationship between the CEO and the directors.When the CEO comes from an external successor,the CEO and the board tend to have different cultures,philosophies and ways of doing things,which increase the cost of communication between the board and the external CEO,and the director’s understanding of the external CEO is focused on the resume interview,there is information asymmetry,and the internal candidates are judged by their longterm performance within the enterprise.Secondly,enterprises have higher performance expectations for external CEOs,so the board of directors will strengthen the supervision of the management behavior of external CEOs,thus affecting the risk of stock price collapse of enterprises.Based on the principal-agent theory and the information asymmetry theory,this paper takes the 2007-2020 Chinese A-share listed companies as a research sample to study the relationship between the source of CEO succession and the risk of corporate stock price collapse,and whether this relationship is consistent between CEOs of different genders and between enterprises of different natures,and studies the influence mechanism of this relationship.The study found that:(1)When the CEO is from an external successor,the lower the risk of future stock price collapse of the enterprise,indicating that when the external CEO succeeds,the board of directors will strengthen supervision,and it is more difficult for the external successor CEO to conceal bad news,which will reduce the risk of the company’s stock price collapse.(2)External CEOs of different genders have different effects on the collapse of corporate stock prices.When the external successor CEO is male,the risk of a stock price crash is more pronounced.This is due to the fact that women have a higher level of risk aversion than men,and the board’s supervisory role in external CEOs is more pronounced in the male sample,reducing their high-risk business investment behavior and the possibility of concealing bad news,reducing the risk of stock price collapse of enterprises.(3)The influence of external CEOs of different corporate nature on the risk of stock price collapse of enterprises is different.In state-owned enterprises,the board of directors has more room to play a supervisory governance role for external CEOs,so in state-owned enterprises,external CEOs significantly reduce the risk of stock price crashes.(4)This paper discusses the transmission mechanism,and the study finds that agency costs have an intermediary effect between external CEOs and stock price crash risks.When an external CEO succeeds,the board’s oversight role over the outside CEO can reduce the risk of a stock price crash by reducing agency costs.After the endogenous test and the robustness test,the above conclusions are still valid.This paper discusses the influencing factors of stock price crash risk from the perspective of CEO succession sources,which is of reference significance for listed companies to hire CEOs and internal governance. |
