How does asset redeployability affect stock price crash risk?
Document Type
Article
Source of Publication
Journal of International Financial Management and Accounting
Publication Date
1-1-2024
Abstract
How does a firm's asset redeployability affect its future stock price crash risk? Asset redeployability, which refers to the ease of selling corporate assets, allows managers to opportunistically exploit asset transactions to manage earnings to hoard bad news, thereby increasing future crash risk. Using a large sample of US firms, we find that firms with higher asset redeployability are more likely to experience a future stock price crash. We further find that this positive association is stronger for firms experiencing greater internal and external pressure to manage earnings. Our study highlights that relying on redeployable assets to orchestrate earnings undermines shareholders' interests, particularly when internal and external pressures incentivize upward earnings management.
DOI Link
ISSN
Publisher
Wiley
Disciplines
Business
Keywords
asset redeployability, asset transactions, bad news hoarding, stock price crash risk
Scopus ID
Recommended Citation
Abbassi, Wajih; Khalifa, Mariem; Saffar, Walid; and Sun, Yuan, "How does asset redeployability affect stock price crash risk?" (2024). All Works. 6710.
https://zuscholars.zu.ac.ae/works/6710
Indexed in Scopus
yes
Open Access
no