Firm-Specific Crash Risk: Revisiting

Abstract

We surveyed the burgeoning literature on the determinants of firm-specific crash risk that relied heavily on the theoretical framework of Jin and Myers (2006) where, established on different drivers, managers engage in bad news hoarding activities. Stock price crash risk, the leptokurtic distribution of firm-specific returns, has been recently attracting considerable research interests. Following Habib, Hasan, and Jiang (2017), we synthesized and categorized a vast body of literature on the determinants of crash risk into: (i) financial reporting and corporate disclosures, (ii) managerial incentives and managerial characteristics, (iii) capital market transactions, (iv)corporate governance mechanisms, and (v) informal institutional mechanisms.