Stakeholder orientation and stock price crash risk

You Li*, Jian ZHANG

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    9 Citations (Scopus)


    This paper examines the asset pricing implication of stakeholder orientation. We exploit the staggered adoption of constituency statues across U.S. states as an exogenous source of variation in stakeholder orientation. The enactment of constituency statues leads to a significant decrease in firm's stock price crash risk relative to comparable firms in non-affected states. Moreover, the negative impact on firm's crash risk only shows up after the stakeholder orientation recognition and thus is unlikely driven by unobservable economic conditions. Overall, the findings are consistent with the view that stakeholder orientation is value-enhancing and helps to curb bad-news-hoarding activities.

    Original languageEnglish
    Article number101370
    JournalFinance Research Letters
    Publication statusPublished - Nov 2020

    Scopus Subject Areas

    • Finance

    User-Defined Keywords

    • Crash risk
    • Disclosure
    • Stakeholder orientation


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