IDEAS home Printed from https://ideas.repec.org/a/eee/finsta/v83y2026ics157230892600001x.html

Social capital and stock price crash risk: cross-country evidence

Author

Listed:
  • Gaganis, Chrysovalantis
  • Leledakis, George N.
  • Pasiouras, Fotios
  • Pyrgiotakis, Emmanouil G.

Abstract

We use a comprehensive cross-country sample to investigate whether and how the country-level social capital influences the firm-level stock price crash risk. We document a negative and statistically significant effect, which is robust to various tests including IV estimations that account for endogeneity concerns. When we disaggregate social capital into its various components, we find that the results are driven by civic and social participation, institutional trust, and family relationships, whereas social networks and interpersonal trust do not appear to matter. Furthermore, we find that the impact of social capital is channeled through firm-level reporting opacity and price informativeness. Finally, the impact of social capital, including most of its components, is moderated by formal institutions, like property rights and law and order.

Suggested Citation

  • Gaganis, Chrysovalantis & Leledakis, George N. & Pasiouras, Fotios & Pyrgiotakis, Emmanouil G., 2026. "Social capital and stock price crash risk: cross-country evidence," Journal of Financial Stability, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finsta:v:83:y:2026:i:c:s157230892600001x
    DOI: 10.1016/j.jfs.2026.101499
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S157230892600001X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jfs.2026.101499?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
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Cavoli, Tony & Khan, Isma & Wali Ullah, G.M., 2025. "Social capital and FinTech lending: international evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 105(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • G0 - Financial Economics - - General
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    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:eee:finsta:v:83:y:2026:i:c:s157230892600001x. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jfstabil .

    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.