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Geopolitical risk, CEO war experience, and stock price crash risk: Evidence from Korea

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  • Choi, Moonseok
  • Han, Seung Hun
  • Kim, Dongjoon

Abstract

This study examines the effect of the CEO war experience on the relationship between North Korea geopolitical risk (NKR) and stock price crash risk. Utilizing KOSPI and KOSDAQ listed firms expanding from 2011 to 2022, we find that the heightened NKR significantly increases firms' stock price crash risk. War-experienced CEOs decrease the stock price crash risk by voluntarily disclosing information to stakeholders, which supports the information transparency mechanism. Those results are consistent with several robustness tests.

Suggested Citation

  • Choi, Moonseok & Han, Seung Hun & Kim, Dongjoon, 2025. "Geopolitical risk, CEO war experience, and stock price crash risk: Evidence from Korea," Economics Letters, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003970
    DOI: 10.1016/j.econlet.2025.112560
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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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