Seminar (Dept. of Accounting)

Theme：Which is responsible for the impact of sustainability engagement on stock price crash risk during the COVID-19 pandemic – Agency theory or legitimacy theory？

Speaker：George Shan, Tenured professor, University of Western Australia

Time：2021-12-29 10:00

Address：Zoom Meeting

Language：English

Venue：Zoom Meeting

https://zoom.us/j/89070366676?pwd=Zk5Rc1Jrc2VVZlN5ZFFZcitUeUliZz09 

Meeting ID：890 7036 6676

password：1229

ABSTRACT:

Using a comprehensive dataset of media coverage and corporate sustainability news released during the first two quarters of COVID-19 in 2020, we find that corporate sustainability news release is positively related to firm-specific stock price crash risk, which is consistent with agency theory indicating that the COVID-19 pandemic exacerbates the tendency for the managers under increasing financial pressure to use sustainability information release as a mechanism masking the withhold bad news for extended periods at the expense of shareholders, then resulting in the highly likelihood  stock price crash risk. Our findings are robust to alternative empirical specifications, estimation methods, and tests for endogeneity.