Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction
© 2020 Elsevier B.V. We find that a CEO's industry tournament incentives (CITI) induce a CEO to undertake strategies that reduce the propensity of a firm to incur future stock price crash risk. CITI also has a mitigating effect on accounting techniques (such as, accrual manipulation, real e...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
2020
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| Online Access: | http://hdl.handle.net/20.500.11937/81960 |
| _version_ | 1848764453957402624 |
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| author | Chowdhury, H. Hodgson, A. Pathan, Md Shams Tabrize |
| author_facet | Chowdhury, H. Hodgson, A. Pathan, Md Shams Tabrize |
| author_sort | Chowdhury, H. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | © 2020 Elsevier B.V.
We find that a CEO's industry tournament incentives (CITI) induce a CEO to undertake strategies that reduce the propensity of a firm to incur future stock price crash risk. CITI also has a mitigating effect on accounting techniques (such as, accrual manipulation, real earnings management, and financial restatement) used as channels for obfuscation and, therefore, is associated with a lower tendency to withhold bad news. CITI is more effective in reducing crash risk propensity when there is lower information quality and weaker external monitoring. Results are robust to firm governance controls, gender monitoring, and the specific personal attributes of CEOs. In short, CITI imposes on CEOs an incentive to brand themselves according to sustained visibility concepts. |
| first_indexed | 2025-11-14T11:19:36Z |
| format | Journal Article |
| id | curtin-20.500.11937-81960 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:19:36Z |
| publishDate | 2020 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-819602022-11-11T08:12:58Z Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction Chowdhury, H. Hodgson, A. Pathan, Md Shams Tabrize © 2020 Elsevier B.V. We find that a CEO's industry tournament incentives (CITI) induce a CEO to undertake strategies that reduce the propensity of a firm to incur future stock price crash risk. CITI also has a mitigating effect on accounting techniques (such as, accrual manipulation, real earnings management, and financial restatement) used as channels for obfuscation and, therefore, is associated with a lower tendency to withhold bad news. CITI is more effective in reducing crash risk propensity when there is lower information quality and weaker external monitoring. Results are robust to firm governance controls, gender monitoring, and the specific personal attributes of CEOs. In short, CITI imposes on CEOs an incentive to brand themselves according to sustained visibility concepts. 2020 Journal Article http://hdl.handle.net/20.500.11937/81960 10.1016/j.jcorpfin.2020.101774 http://creativecommons.org/licenses/by-nc-nd/4.0/ fulltext |
| spellingShingle | Chowdhury, H. Hodgson, A. Pathan, Md Shams Tabrize Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction |
| title | Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction |
| title_full | Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction |
| title_fullStr | Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction |
| title_full_unstemmed | Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction |
| title_short | Do external labour market incentives constrain bad news hoarding? The CEO's industry tournament and crash risk reduction |
| title_sort | do external labour market incentives constrain bad news hoarding? the ceo's industry tournament and crash risk reduction |
| url | http://hdl.handle.net/20.500.11937/81960 |