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Artificial intelligence innovation and stock price crash risk

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  • Junru Zhang
  • Chen Cui
  • Chen Zheng
  • Grantley Taylor

Abstract

This study examines the association between artificial intelligence innovation (AII) and stock price crash risk (SPCR). AII serves as a governance mechanism that can bolster strength in internal controls, leading to increased financial transparency and thereby reducing the likelihood of future SPCR. The results hold after accounting for possible endogeneity issues Further, we find that monitoring through corporate governance mechanisms, level of following by equity analysts, and the reduced information asymmetry constitute important channels that mediate the association between AII and SPCR. Additionally, the relationship between AII and SPCR varies across corporate life cycle stages and workplace culture.

Suggested Citation

  • Junru Zhang & Chen Cui & Chen Zheng & Grantley Taylor, 2025. "Artificial intelligence innovation and stock price crash risk," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 48(2), pages 503-543, June.
    • Handle: RePEc:bla:jfnres:v:48:y:2025:i:2:p:503-543
    DOI: 10.1111/jfir.12424
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