Equity Market Competition and Stock Price Crash Risk

Download or read book Equity Market Competition and Stock Price Crash Risk written by Patrick Vorst and published by . This book was released on 2017 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the impact of equity market competition on stock price crash risk. Higher levels of equity market competition lead to a faster incorporation of information into stock prices, so that the amount of information that is at any time impounded into prices is greater. I find that equity market competition reduces the effectiveness of bad news hiding and is associated with a reduced likelihood of crashes. Additional tests show that the importance of equity market competition is concentrated in firms with higher levels of information asymmetry and during high-sentiment periods and provide further support for this hypothesis.