Corporate social irresponsibility,CEO overconfidence,and stock price crash risk |
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Authors: | Yun-Chi Lee Yang-Cheng Lu |
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Institution: | 1. Department of Finance, School of Management, Ming Chuan University, Taipei, Taiwan;2. Taiwan Academy of Banking and Finance, Taipei, Taiwan |
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Abstract: | This study examines whether and how corporate social irresponsibility (CSI) influences stock price crash risk for firms with overconfident CEOs. We find that the positive association between CEO overconfidence and stock price crash risk as shown in prior studies is significantly weakened when firms have higher CSI concerns. As a result, our intriguing findings demonstrate that investors are less surprised at the negative news hoarded by overconfident CEOs of CSI firms, possibly because they are already aware of and have previously reacted to the socially irresponsible behavior in their daily operations. |
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Keywords: | Corporate social irresponsibility CEO overconfidence stock price crash risk |
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