IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v52y2025i1p182-221.html
   My bibliography  Save this article

Generalist CEOs and stock price crash risk

Author

Listed:
  • Xiaohua Fang
  • Claudia Girardone
  • Yiwei Li
  • Yeqin Zeng

Abstract

We investigate whether generalist chief executive officers (CEOs), that is, CEOs who gain transferable skills across firms and industries, have less incentive to hoard bad news. To address endogeneity concerns stemming from firm–CEO matching, we deploy a difference‐in‐differences method utilizing exogenous CEO turnovers, propensity score matching and entropy balancing matching methods, and Oster's coefficient stability test. Supporting our conjecture, we find a negative relation between CEOs’ general ability index (GAI) and future stock price crash risk. The effect of CEOs’ GAI on crash risk is stronger when labor demand is stronger and when firms have more agency conflicts. Our analysis further suggests that generalist CEOs attenuate crash risk by increasing conditional accounting conservatism and reducing real earnings management. Taken together, our findings highlight the role of CEOs’ general human capital in increasing their tolerance for failure and mitigating the agency problem.

Suggested Citation

  • Xiaohua Fang & Claudia Girardone & Yiwei Li & Yeqin Zeng, 2025. "Generalist CEOs and stock price crash risk," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 52(1), pages 182-221, February.
    • Handle: RePEc:bla:jbfnac:v:52:y:2025:i:1:p:182-221
    DOI: 10.1111/jbfa.12804
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jbfa.12804
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jbfa.12804?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jbfnac:v:52:y:2025:i:1:p:182-221. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.