Do Executives Have Fixed Effects on Firm-Level Stock Price Crash/Jump Risk? Evidence from CEOS and Cfos

80 Pages Posted: 1 Nov 2024

See all articles by Yu Zhou

Yu Zhou

Guangdong University of Finance and Economics

Jiaxin Liu

Morgan State University

Yakun Wang

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics; Shenzhen Finance Institute

Ting Chen

University of Massachusetts Boston - College of Management

Abstract

This paper investigates whether individual CEOs and CFOs have manager’s fixed effects on firm-level future stock price crash and jump risk. We find that both CEOs and CFOs have fixed effects on firm-level stock price crash and jump risk. Such effects hold to a battery of robustness tests. We find that such fixed effects are less pronounced for firms with better information environments and that CEOs’ fixed effects are stronger than that of CFOs’. Lastly, consistent with managers’ fixed effects, we find that CEOs’ professional qualifications (e.g. MBA and JD degree and CPA license) and CFOs’ family status and military experience are associated with stock price crash and jump risk.

Keywords: G3, M40, M5

Suggested Citation

Zhou, Yu and Liu, Jiaxin and Wang, Yakun and Chen, Ting, Do Executives Have Fixed Effects on Firm-Level Stock Price Crash/Jump Risk? Evidence from CEOS and Cfos. Available at SSRN: https://ssrn.com/abstract=5007128 or http://dx.doi.org/10.2139/ssrn.5007128

Yu Zhou

Guangdong University of Finance and Economics ( email )

Room 339, the 2nd North Building
21th Luntou Road
Guangzhou, 510320
China

Jiaxin Liu (Contact Author)

Morgan State University ( email )

1700 E. Cold Spring Ln
Baltimore, MD 21251
United States

Yakun Wang

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics ( email )

2001 Longxiang Road, Longgang District
Shenzhen, 518172
China

Shenzhen Finance Institute ( email )

Ting Chen

University of Massachusetts Boston - College of Management ( email )

Boston, MA
United States

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