Can executive mobility reduce the stock price crash risk? Evidence from China

Abstract

The 21st century has witnessed increasing fluctuations in both the real economy and financial markets around the world. How to maintain the stability of the capital market has attracted more serious attention. This paper examines the impact of executive mobility on the stock price crash risk at the company level. Based on the data of A-share listed companies during 2010–2019, our empirical results show that executive mobility can effectively reduce the stock price crash risk. Furthermore, our research confirms that employee salaries play an intermediary role in the impact of executive mobility on the stock price crash risk. This paper has important implications for companies in emerging markets to optimise the structure of their executive teams.

Keywords:

• Executive mobility
• stock price crash risk
• employee salaries

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

The present research was financially supported by the National Natural Science Foundation of China [Grant No. 71573156].