Insider trading, gender diversity within the board room, CEO pay gap, and stock price crash risk
Article
Viet, L., Nguyen, A. and Gregoriou, A. 2022. Insider trading, gender diversity within the board room, CEO pay gap, and stock price crash risk. International Journal of Finance & Economics. https://doi.org/10.1002/ijfe.2731
Type | Article |
---|---|
Title | Insider trading, gender diversity within the board room, CEO pay gap, and stock price crash risk |
Authors | Viet, L., Nguyen, A. and Gregoriou, A. |
Abstract | This paper investigates the impact of insider trading and managerial attributes on future stock price crashes. We conduct a series of regressions addressing the managerial attributes determinants of future stock price crashes including gender diversity, CEO age, and CEO power (measured by CEO pay disparity, CEO tenure and CEO duality). Our empirical results reveal a positive association between insider purchases and price crash risk. This implies that other than compensation and career concerns, insiders hoard bad news to fulfil their trading incentives. Our positive coefficients of insider sales also suggest that insider sellers can assess inside information promptly and anticipate shortly before the crashes. We further document that the presence of female directors on boards can mitigate stock price crash risk. However, firms with powerful or younger Chief Executive Officers are more likely to experience crashes. Overall, we highlight the importance of corporate managerial attributes in dealing with information asymmetry problems. |
Keywords | CEO pay disparity; gender diversity; insider returns; price crash risk |
Sustainable Development Goals | 5 Gender equality |
8 Decent work and economic growth | |
Middlesex University Theme | Sustainability |
Publisher | Wiley |
Journal | International Journal of Finance & Economics |
ISSN | 1076-9307 |
Electronic | 1099-1158 |
Publication dates | |
Online | 24 Nov 2022 |
Publication process dates | |
Deposited | 21 Oct 2022 |
Submitted | 15 Jan 2021 |
Accepted | 20 Oct 2022 |
Output status | Published |
Publisher's version | License File Access Level Open |
Accepted author manuscript | File Access Level Restricted |
Copyright Statement | © 2022 The Authors. International Journal of Finance & Economics published by John Wiley & Sons Ltd. |
Digital Object Identifier (DOI) | https://doi.org/10.1002/ijfe.2731 |
Web of Science identifier | WOS:000890719300001 |
Language | English |
https://repository.mdx.ac.uk/item/8q1yq
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Publisher's version
Int_J_Fin_Econ-2022-Le-InsiderTradingGenderDiversityWithinTheBoardRoomCEOPayGapAndStockPriceCrash.pdf | ||
License: CC BY 4.0 | ||
File access level: Open |
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