Does CEO-chairman dialect similarity affect stock price informativeness for Chinese listed firms? |
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| Institution: | 1. Department of Economics, Finance and Accounting, Fort Hays State University, Kansas 67601, United States;2. School of Economics and Business Administration, Chongqing University, Chongqing 400030, People''s Republic of China;3. Business School, The University of Queensland, St. Lucia, Queensland 4072, Australia;4. University of Findlay, Findlay, OH 45840, United States. |
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| Abstract: | Does CEO-chairman dialect similarity (CCDS) affect stock price informativeness? Based on a sample of Chinese publicly listed firms for the period of 2012–2017, we find that CCDS significantly improves stock price informativeness. Our result implies that CCDS increases the loyalty of managers to their board, and deters them from extracting private benefits, which leads to more informative stock prices. Furthermore, our subsample analyses show that this relationship between CCDS and stock price informativeness is only found in firms that have more media coverage, higher institutional ownership and a non-busy board. Our results also suggest that mutual trust between the CEO and chairman is a possible channel through which CCDS improves stock price informativeness. |
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| Keywords: | CEO-chairman dialect similarity (CCDS) Stock price informativeness China C23 G3 |
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