Does Stock Price Crash of Firms in the Same Business Group Cause Stock Price Crash in Other Member Firm? Evidence from Korea

Kwon, Sewon; Jung, Taejin; Hee-Yeon, Sunwoo; Yim, Sang-Giun

doi:10.1080/1540496x.2018.1562891

Cited by 8 publications

(5 citation statements)

References 58 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The coefficient of empirical estimations is significantly positive among all the measures of spillover outcome of stock price crash indicating and disclosing that SPC spillover to all other firms belongs to the same group which is in line with our second hypotheses. Our findings are also supported by the study of Kwon et al [44].…”

Section: Resultssupporting

confidence: 93%

Is there any association between real earnings management and crash risk of stock price during uncertainty? An evidence from family-owned firms in an emerging economy

2020

View full text Add to dashboard Cite

This research work intends to analyze the association between real earnings manipulation and stock price crash. Further, we also analyze the spillover outcome of the crash as a result of applying real earnings management. It is hypothesized that there is a positive and statistically significant association between real activities manipulation and crash risk. It is also assumed that this spillover outcome is more noticeable during uncertainty. By applying data of family firms for the time period 2005–2018, empirical results provide the proof that real manipulation has a significant impact on stock crash for a developing economy like Pakistan among family-based companies. This research work also gives a statistical insight that spillover outcome is more notable for firms facing uncertainty. Our statistical estimations are in support of the assumed hypotheses of the study. This study has very significant and practical implications for academic researchers, standard setters, and investors.

show abstract

Section: Resultssupporting

confidence: 93%

Is there any association between real earnings management and crash risk of stock price during uncertainty? An evidence from family-owned firms in an emerging economy

2020

View full text Add to dashboard Cite

show abstract

“…A number of scholars also document the spillover effect within chaebols at credit rate (Kwon et al (2016) and Joe and Oh (2018)) and earnings announcements (Bae et al, 2008). Kwon et al (2019) also find a positive association for stock price crash risk between affiliates of the same business group. Other articles examine the advantage of chaebol membership in terms of fundraising.…”

Section: Internal Capital Markets and Business Group Membershipmentioning

confidence: 92%

Investors’ Perception of Business Group Membership during An Economic Crisis: Evidence from the COVID-19 Pandemic

Ducret

2021

SSRN Journal

View full text Add to dashboard Cite

This paper examines how investors perceive business group membership in Korea during the COVID-19 pandemic. Stock price performance analysis reveals evidence of a time-varying and heterogeneous value of affiliation: investors discount business group affiliation during a market collapse, but are willing to pay a premium for affiliation during market recovery. Overall, this pattern is more pronounced for financially weak affiliates and large business groups. The results further show that business group membership alleviates investors' concerns regarding financial flexibility, highlighting the role of internal capital markets as a substitute for external finance.

show abstract

“…Some studies examine the effect of crash risk on the speed of leverage adjustment (An et al, 2015), financial cost (Gu et al, 2019), crash risk within business groups' future CEO power (Harper et al, 2020), government subsidies (Teng et al, 2020), and audit decisions (Chu et al, 2019; Hackenbrack et al, 2014; Lee, 2022). Others examine the spread of crash risk within a business group and along the supply chain (Kwon et al, 2019; Qiu et al, 2019). As crash risk implies the release of hidden adverse information by firms, it also signals poor corporate governance.…”

Section: Introductionmentioning

confidence: 99%

What firm risk factors drive bank loan pricing and other terms? Evidence from China

Jin

Wang

Xiao

et al. 2022

Accounting & Finance

View full text Add to dashboard Cite

This study investigates how firm risk factors affect bank loan pricing. Although firm‐specific stock price crash risk affects bank loan costs directly, it also prompts other risks, including financial restatement and litigation, which in turn trigger higher bank loan costs. Strong internal and external governance mechanisms help reduce agency problems and improve information transparency, alleviating the adverse effect of stock price crash risk on loan costs. Our results confirm that bankers take good corporate governance into account in their bank loan decisions. We also show that bond investors price the adverse effect of stock price crash risk, prompting higher corporate bond costs. Futher evidence suggests that banks impose stricter non‐price terms, such as smaller loan size, shorter loan maturity, and a higher likelihood of collateral requirement, on firms with higher crash risk.

show abstract

Does Stock Price Crash of Firms in the Same Business Group Cause Stock Price Crash in Other Member Firm? Evidence from Korea

Cited by 8 publications

References 58 publications

Is there any association between real earnings management and crash risk of stock price during uncertainty? An evidence from family-owned firms in an emerging economy

Is there any association between real earnings management and crash risk of stock price during uncertainty? An evidence from family-owned firms in an emerging economy

Investors’ Perception of Business Group Membership during An Economic Crisis: Evidence from the COVID-19 Pandemic

What firm risk factors drive bank loan pricing and other terms? Evidence from China

Contact Info

Product

Resources

About