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CFO cultural background and stock price crash risk

Fu, Xi and Zhang, Zhifang (2019) 'CFO cultural background and stock price crash risk.' Journal of International Financial Markets, Institutions and Money. ISSN 1042-4431

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We investigate the relation between the cultural background of chief financial officers (CFOs) and stock price crash risk. Using a novel single-country setting in the U.K. market, we find robust evidence that CFOs from cultural backgrounds that emphasise uncertainty avoidance are negatively associated with firms’ stock price crash risk. Our evidence further shows that the effect of CFO uncertainty avoidance is more pronounced for firms with higher information asymmetry and riskiness, and when CFOs have a greater ability to influence firm decisions. Overall, the results shed light on the important role of CFO cultural background for firm policies and outcomes.

Item Type: Article
Uncontrolled Keywords: Managerial cultural background, Uncertainty avoidance, Stock price crash risk
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School > Essex Accounting Centre
Depositing User: Elements
Date Deposited: 24 May 2019 09:22
Last Modified: 21 May 2020 01:00

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