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Married CEOs and Stock Price Crash Risk

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  • Kim, Jeong-Bon
  • Liao, Shushu
  • Liu, Yangke

Abstract

This study examines whether marriage, as a social construct and cultural norm, can affect firm-level stock price crash risk. We find that firms managed by married CEOs are associated with lower future stock price crash risk, after controlling for a set of firm characteristics and CEO traits. We document that CEO marriage reduces crash risk by curbing bad news hoarding and formation activities. Moreover, the attenuating impact of CEO marriage on crash risk is more pronounced among firms with weaker corporate governance and those run by less prominent, higher-delta, and lower paid CEOs.

Suggested Citation

  • Kim, Jeong-Bon & Liao, Shushu & Liu, Yangke, 2021. "Married CEOs and Stock Price Crash Risk," QBS Working Paper Series 2021/09, Queen's University Belfast, Queen's Business School.
    • Handle: RePEc:zbw:qmsrps:202109
    DOI: 10.2139/ssrn.3958224
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    Cited by:

    1. Ming-Hua Liu & Shaohua Tian & Yang Zhang, 2023. "CEO marital status and corporate tax planning behavior," Review of Quantitative Finance and Accounting, Springer, vol. 61(4), pages 1207-1242, November.

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    More about this item

    Keywords

    Marriage; CEO; crash risk; bad news hoarding; corporate governance; compensation;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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