Please use this identifier to cite or link to this item: http://bura.brunel.ac.uk/handle/2438/31146
Title: Press freedom and stock price crash risk
Authors: Hui, Z
Dong, Y
Li, H
Keywords: press freedom;stock price crash risk;bad news hoarding
Issue Date: 29-Apr-2025
Publisher: Elsevier
Citation: Hui, Z., Dong, Y. and Li, H. (2025) 'Press freedom and stock price crash risk', Journal of Accounting and Public Policy, 51, 107323, pp. 1 - 27. doi: 10.1016/j.jaccpubpol.2025.107323.
Abstract: This paper examines the impact of press freedom, an important institutional factor, on stock price crash risk. Using a large international sample of firms across 52 economies between 2002 and 2021, we find that firms in economies with higher degrees of press freedom are associated with lower levels of future stock price crash risk. Our analysis further shows that press freedom helps to deter the hoarding of bad news by increasing the intensity of reporting, extending the reporting period, and broadening local media coverage. Firms operating in economies with press freedom demonstrate stronger corporate governance and lower levels of firm-specific and long-term overvaluation, which are likely mechanisms through which press freedom mitigates crash risk. The negative impact of press freedom on crash risk is weakened by corruption but strengthened for firms facing higher short interest and less analyst coverage. Additional tests reveal that this negative relationship is driven by a collective influence from multiple dimensions of press freedom. Our results survive a battery of robustness checks. In sum, our findings suggest that press freedom enhances the stability of the global stock market by discouraging the concealment of negative information.
Description: Data availability: Data will be made available on request.
URI: https://bura.brunel.ac.uk/handle/2438/31146
DOI: https://doi.org/10.1016/j.jaccpubpol.2025.107323
ISSN: 0278-4254
Other Identifiers: ORCiD: Yizhe Dong https://orcid.org/0000-0001-7272-2430
ORCiD: Haoyu Li https://orcid.org/0000-0003-1484-7555
Article number 107323
Appears in Collections:Brunel Business School Research Papers

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