TY - JOUR
T1 - Heterogeneous political connections and stock price crash risk
T2 - Evidence from Malaysia
AU - Tee, Chwee Ming
AU - Lee, Mei Yee
AU - Majid, Abdul
N1 - Funding Information:
We are grateful to Ferdinand A. Gul, Yessy Peranginangin and Neale O’Connor for their constructive comments. We thank an anonymous reviewer and the participants of the 42nd Congress of European Accounting Association 2019 at Paphos, Cyprus for their valuable comments and suggestions. We acknowledge financial support from Monash University Malaysia Seed Grant ( B-7-17 and B-10-17 ), and data collection work by research assistants from Monash University Malaysia .
Publisher Copyright:
© 2021 Elsevier B.V.
PY - 2021/9
Y1 - 2021/9
N2 - This study examines whether the withholding of bad news from shareholders by managers is influenced by the different types of political connections that a firm may have. Specifically, we investigate whether the length of political connections, different types of ownership structures of politically connected firms, and different kinds of political ties have similar effects on stock price crash risk. Based on an analysis of a comprehensive Malaysian dataset of public listed firms for the period 2007 to 2016, our results show that older politically connected firms, government-linked companies and firms connected through shareholders to important politicians have greater stock price crash risk. The management suppressing negative information from other shareholders differs according to different types of political connections.
AB - This study examines whether the withholding of bad news from shareholders by managers is influenced by the different types of political connections that a firm may have. Specifically, we investigate whether the length of political connections, different types of ownership structures of politically connected firms, and different kinds of political ties have similar effects on stock price crash risk. Based on an analysis of a comprehensive Malaysian dataset of public listed firms for the period 2007 to 2016, our results show that older politically connected firms, government-linked companies and firms connected through shareholders to important politicians have greater stock price crash risk. The management suppressing negative information from other shareholders differs according to different types of political connections.
KW - Government-linked companies
KW - Heterogeneous political connections
KW - Information withholding
KW - Length of political connections
KW - Political ties
KW - Stock price crash risk
UR - http://www.scopus.com/inward/record.url?scp=85111875328&partnerID=8YFLogxK
U2 - 10.1016/j.jbef.2021.100552
DO - 10.1016/j.jbef.2021.100552
M3 - Article
AN - SCOPUS:85111875328
SN - 2214-6350
VL - 31
JO - Journal of Behavioral and Experimental Finance
JF - Journal of Behavioral and Experimental Finance
M1 - 100552
ER -