Time: 14:30-15:30, Dec.3rd 2020 Thursday

Speaker: Eric Ping Yeung, Professor, Cornell University

ZOOM: 647 396 32673

Password:744364

Link: https://zoom.com.cn/j/64739632673

Abstract:

In contrast with the evidence that institutional ownership increases firm-level stock price crash risk, this study finds that institutional common ownership reduces crash risk. In the settings of earnings announcements, we document that common ownership helps mitigate the contagion effect of peer firms’ large bad news (while institutional ownership aggravates it). In cross-sectional tests, we find evidence consistent with a negative causal effect of common ownership on crash risk. The negative effect is more pronounced for firms whose information is ambiguous (i.e., unclear whether industry-wide or firm-specific). Our findings support the stabilizing role of common owners in the market due to their information advantage, allowing them to better differentiate between the firm-specific and industry-wide nature of bad news, thus avoid selling on false signals.

Biography：

Professor Eric Ping Yeung is professor of accounting at the Samuel Curtis Johnson Graduate School of Management at Cornell University. Yeung’s research examines the relation between accounting information and economic fundamentals, as well as the economic and behavioral factors that influence (1) how market participants use accounting information and (2) how managers provide accounting information. His research has been published in The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Contemporary Accounting Research, Review of Financial Studies, Strategic Management Journal, and Management Science. Professor Yeung received his professional accountancy degree from the Chinese University of Hong Kong and PhD degree from University of Oregon. He currently teaches intermediate financial accounting, and received a teaching award at Oregon.