Does Stock Price Crash of Firms in the Same Business Group Cause Stock Price Crash in Other Member Firm? Evidence from Korea
- 주제(키워드) business group affiliation , spillover , stock price crash
- 등재 SSCI, SCOPUS
- 발행기관 ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
- 발행년도 2019
- URI http://www.dcollection.net/handler/ewha/000000176698
- 본문언어 영어
- Published As https://dx.doi.org/10.1080/1540496X.2018.1562891
- 저작권 이화여자대학교 논문은 저작권에 의해 보호받습니다.
초록/요약
This article examines the spillover of stock price crash within business groups. Using Korean business group data, we find that the crash risk of a firm is positively associated with the crash risk of other member firms in the same business group. We also find that crashes spread but do not arise simultaneously across firms within a business group. Further analyses reveal that the documented association is stronger in firms with more inter-company transactions and those with lower market-to-book ratios. Our article contributes to the literature by suggesting that the consequence of opportunistic behaviors of controlling shareholders (i.e., stock crash of a member firm) spills over within business groups.
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