Product market competition and stock price crash risk: Exploring the role of managerial ownership

Ramzi Benkraiem; Emilios Galariotis; Assil Guizani; Faten Lakhal

doi:10.1016/j.ribaf.2022.101786

Product market competition and stock price crash risk: Exploring the role of managerial ownership

Ramzi Benkraiem^*, Emilios Galariotis, Assil Guizani, Faten Lakhal

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

9 Scopus citations

Abstract

The purpose of this paper is to examine whether product market competition is a means of external shareholders’ protection likely to decrease the stock price crash risk. The results show that product market competition is an effective corporate governance mechanism that is likely to constrain managers to disclose bad news regularly to the market, which in turn mitigates the risk of stock price crashes. The results also show that the negative effect of product market competition on stock price crashes is more pronounced for owner-managers. These results suggest that managerial ownership is likely to align managerial interests with shareholders ones.

Original language	English
Article number	101786
Journal	Research in International Business and Finance
Volume	63
DOIs	https://doi.org/10.1016/j.ribaf.2022.101786
State	Published - Dec 2022
Externally published	Yes

Bibliographical note

Publisher Copyright:
© 2022 Elsevier B.V.

Keywords

Managerial ownership
Product market competition
Stock price crash risk

ASJC Scopus subject areas

Business, Management and Accounting (miscellaneous)
Finance

Access to Document

10.1016/j.ribaf.2022.101786

Cite this

@article{559d7e0db3da4e7aa38c8d93092e9d5c,

title = "Product market competition and stock price crash risk: Exploring the role of managerial ownership",

abstract = "The purpose of this paper is to examine whether product market competition is a means of external shareholders{\textquoteright} protection likely to decrease the stock price crash risk. The results show that product market competition is an effective corporate governance mechanism that is likely to constrain managers to disclose bad news regularly to the market, which in turn mitigates the risk of stock price crashes. The results also show that the negative effect of product market competition on stock price crashes is more pronounced for owner-managers. These results suggest that managerial ownership is likely to align managerial interests with shareholders ones.",

keywords = "Managerial ownership, Product market competition, Stock price crash risk",

author = "Ramzi Benkraiem and Emilios Galariotis and Assil Guizani and Faten Lakhal",

note = "Publisher Copyright: {\textcopyright} 2022 Elsevier B.V.",

year = "2022",

month = dec,

doi = "10.1016/j.ribaf.2022.101786",

language = "English",

volume = "63",

journal = "Research in International Business and Finance",

issn = "0275-5319",

publisher = "Elsevier B.V.",

}

TY - JOUR

T1 - Product market competition and stock price crash risk

T2 - Exploring the role of managerial ownership

AU - Benkraiem, Ramzi

AU - Galariotis, Emilios

AU - Guizani, Assil

AU - Lakhal, Faten

PY - 2022/12

Y1 - 2022/12

N2 - The purpose of this paper is to examine whether product market competition is a means of external shareholders’ protection likely to decrease the stock price crash risk. The results show that product market competition is an effective corporate governance mechanism that is likely to constrain managers to disclose bad news regularly to the market, which in turn mitigates the risk of stock price crashes. The results also show that the negative effect of product market competition on stock price crashes is more pronounced for owner-managers. These results suggest that managerial ownership is likely to align managerial interests with shareholders ones.

AB - The purpose of this paper is to examine whether product market competition is a means of external shareholders’ protection likely to decrease the stock price crash risk. The results show that product market competition is an effective corporate governance mechanism that is likely to constrain managers to disclose bad news regularly to the market, which in turn mitigates the risk of stock price crashes. The results also show that the negative effect of product market competition on stock price crashes is more pronounced for owner-managers. These results suggest that managerial ownership is likely to align managerial interests with shareholders ones.

KW - Managerial ownership

KW - Product market competition

KW - Stock price crash risk

UR - https://www.scopus.com/pages/publications/85140723489

U2 - 10.1016/j.ribaf.2022.101786

DO - 10.1016/j.ribaf.2022.101786

M3 - Article

AN - SCOPUS:85140723489

SN - 0275-5319

VL - 63

JO - Research in International Business and Finance

JF - Research in International Business and Finance

M1 - 101786

ER -

Product market competition and stock price crash risk: Exploring the role of managerial ownership

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

Access to Document

Fingerprint

Cite this