Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

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Corporate Research and Development Strategy and Stock Price Crash Risk

Authors
Xinzhu Zhang1, †, Yu Zhang2, †, Yuxin Mao3, †, *
1Rutgers Business School, Rutgers University, New Brunswick, New Jersey 08901, United States
2College of Art and Science, The University of North Carolina at Chapel Hill, Chapel Hill, North Carolina, 27514, United States
3School of Management and Economics, The Chinese University of Hong Kong, Shenzhen, Guangdong 518172, China
†

These authors contributed equally.

*Corresponding author. Email: yuxinmao@link.cuhk.edu.cn
Corresponding Author
Yuxin Mao
Available Online 15 December 2021.
DOI
10.2991/assehr.k.211209.123How to use a DOI?
Keywords
Research and development; stock price crash risk; corporate governance; information disclosure; emerging market
Abstract

This paper investigates the effect of research and development activity on stock price crash risk. Using a large sample of 3568 Chinese listed companies for the period 2007-2019, it is found that R&D expenditure in China is negatively associated with stock price crash risk, which suggests that the disclosure of innovation expenditures decreases the risk of dominant stock price fall. The robustness analyses suggest that the association between research and development ratio and crash risk is more pronounced in firms from emerging markets with high leverage, lower return on assets, non-Big 4 auditors, lower institutional shareholdings, and non-stated-owned enterprises. Our findings advance the understanding of research and development activity’s attributes and the benefits of its disclosure in emerging markets.

Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
10.2991/assehr.k.211209.123
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.123How to use a DOI?
Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

risenwbib
TY  - CONF
AU  - Xinzhu Zhang
AU  - Yu Zhang
AU  - Yuxin Mao
PY  - 2021
DA  - 2021/12/15
TI  - Corporate Research and Development Strategy and Stock Price Crash Risk
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 745
EP  - 755
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.123
DO  - 10.2991/assehr.k.211209.123
ID  - Zhang2021
ER  -