An Empirical Research On The Impact Of CEO-chairman Duality On Stock Price Crash Risk

Listed company's stock price crash is becoming a world-wide financial phenomenon which cannot be neglected.Compared with developed capital markets in western counties,China's stock market is quite less stable.The phenomenon of stock price crash leads to stock price risk.This kind of risk has brought enormous and destructive impact to the healthy development of the stock market and the personal wealth of investors.Government regulators,investors and academia have been attracted by this hot discussed topic.Especially in recent decades,the worldwide financial crisis has made stock price risk becoming a serious issue of macroeconomic and microeconomic finance.China's previous rapid economic development and the gradual accumulation of financial risks and vulnerabilities are the major problems for the current situation which the government has to face,the research of this study has the theoretical and practical importance to decrease financial risk of China's capital market and promote stable development of China's stock market.In this study,the influences of CEO-Chairman duality on future stock price crash risk of certain companies have been investigated.CEO-Chairman duality magnifies managerial incentive and probability to overstate or even exaggerate financial reports' performance and conceal negative news about companies from investors.This process would increase the probable occurrence of stock price crash risk.Employing the data of Chinese listed companies over the period of 2004-2014,this study presents strong evidence that CEO-Chairman duality is positively associated with firm-specific stock price crash risk.Furthermore,this study explores that the impact of CEO-Chairman duality on increasing crash risk is more pronounced and significant for firms with high information asymmetry.The findings of this study have an important role in the context of CEO-Chairman duality and stock price fluctuations.Meanwhile,under the agency theory,this study extends the field of research that examines the consequences of CEO-Chairman duality to crash risk.The conclusions of this study support the implications that the CEOChairman duality leadership structure are more likely to result in worse corporate governance in China listed companies.