Author : Feng Guo
Publisher :
ISBN 13 :
Total Pages : 47 pages
Book Rating : 4.:/5 (13 download)
Book Synopsis The Impact of Information Technology on Stock Price Crash Risk by : Feng Guo
Download or read book The Impact of Information Technology on Stock Price Crash Risk written by Feng Guo and published by . This book was released on 2019 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of information technologies on stock price crash risk. Information technology advancements change the way firm-specific information is disseminated and acquired, providing significant benefits to investors. We use the required staggered implementation of the SEC's Electronic Data Gathering and Analysis Retrieval system (EDGAR) to examine the impact of information technologies on stock price crash risk. We find that the implementation of EDGAR is associated with a decrease in stock price crash risk and this effect is more pronounced for firms with greater information asymmetry. Additionally, we provide evidence that conservatism increases following the EDGAR implementation, suggesting that more timely recognition of bad news is a channel through which stock price crash risk decreases following the implementation. Our results suggest that information technologies that strengthen the monitoring ability of investors limit managers' ability to conceal and hoard bad news, which ultimately reduces stock price crash risk.