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An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China

Larry Su Orcid Logo, Elmina Homapour Orcid Logo, Fabio Caraffini Orcid Logo, Francisco Chiclana Orcid Logo

Mathematics, Volume: 10, Issue: 19, Start page: 3464

Swansea University Author: Fabio Caraffini Orcid Logo

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DOI (Published version): 10.3390/math10193464

Abstract

There is a large volume of literature in international business on multinationality. There is an equally large volume of literature in finance on stock price crash risk. However, very few studies have attempted to provide a link between these two research areas. Using an unbalanced panel data consis...

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Published in: Mathematics
ISSN: 2227-7390
Published: MDPI AG 2022
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URI: https://cronfa.swan.ac.uk/Record/cronfa61281
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first_indexed 2022-09-23T09:58:43Z
last_indexed 2023-01-13T19:21:57Z
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spelling 2022-10-12T15:20:02.3119706 v2 61281 2022-09-20 An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China d0b8d4e63d512d4d67a02a23dd20dfdb 0000-0001-9199-7368 Fabio Caraffini Fabio Caraffini true false 2022-09-20 SCS There is a large volume of literature in international business on multinationality. There is an equally large volume of literature in finance on stock price crash risk. However, very few studies have attempted to provide a link between these two research areas. Using an unbalanced panel data consisting of 473 multinational corporations (MNCs) publicly listed in the Chinese stock markets during 2004 to 2020, this paper is one of the first to empirically investigate whether and to what extent multinationality affects stock price crash risk. The paper finds strong evidence that multinational operation is negatively related to stock price crash risk. In addition, MNCs with better corporate governance quality experience larger decline in stock price crash risk when the degree of multinationality increases. Furthermore, MNCs with higher stock market liquidity experience lower crash risk. An important implication is that companies should strengthen their corporate governance and market liquidity while “going global”. Journal Article Mathematics 10 19 3464 MDPI AG 2227-7390 multinational corporations (MNCs); stock price crash risk; multinationality; Chinese stock markets 23 9 2022 2022-09-23 10.3390/math10193464 COLLEGE NANME Computer Science COLLEGE CODE SCS Swansea University Other This research received no external funding. 2022-10-12T15:20:02.3119706 2022-09-20T09:00:01.4690241 Faculty of Science and Engineering School of Mathematics and Computer Science - Computer Science Larry Su 0000-0001-8285-5122 1 Elmina Homapour 0000-0001-9756-2744 2 Fabio Caraffini 0000-0001-9199-7368 3 Francisco Chiclana 0000-0002-3952-4210 4 61281__25196__cb9a911166714160a6cc169f544f379a.pdf mathematics-10-03464.pdf 2022-09-23T10:55:54.8822650 Output 272145 application/pdf Version of Record true © 2022 by the authors. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license true eng https://creativecommons.org/licenses/by/4.0/ 125
title An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
spellingShingle An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
Fabio Caraffini
title_short An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
title_full An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
title_fullStr An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
title_full_unstemmed An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
title_sort An Empirical Investigation of Multinationality and Stock Price Crash Risk for MNCs in China
author_id_str_mv d0b8d4e63d512d4d67a02a23dd20dfdb
author_id_fullname_str_mv d0b8d4e63d512d4d67a02a23dd20dfdb_***_Fabio Caraffini
author Fabio Caraffini
author2 Larry Su
Elmina Homapour
Fabio Caraffini
Francisco Chiclana
format Journal article
container_title Mathematics
container_volume 10
container_issue 19
container_start_page 3464
publishDate 2022
institution Swansea University
issn 2227-7390
doi_str_mv 10.3390/math10193464
publisher MDPI AG
college_str Faculty of Science and Engineering
hierarchytype
hierarchy_top_id facultyofscienceandengineering
hierarchy_top_title Faculty of Science and Engineering
hierarchy_parent_id facultyofscienceandengineering
hierarchy_parent_title Faculty of Science and Engineering
department_str School of Mathematics and Computer Science - Computer Science{{{_:::_}}}Faculty of Science and Engineering{{{_:::_}}}School of Mathematics and Computer Science - Computer Science
document_store_str 1
active_str 0
description There is a large volume of literature in international business on multinationality. There is an equally large volume of literature in finance on stock price crash risk. However, very few studies have attempted to provide a link between these two research areas. Using an unbalanced panel data consisting of 473 multinational corporations (MNCs) publicly listed in the Chinese stock markets during 2004 to 2020, this paper is one of the first to empirically investigate whether and to what extent multinationality affects stock price crash risk. The paper finds strong evidence that multinational operation is negatively related to stock price crash risk. In addition, MNCs with better corporate governance quality experience larger decline in stock price crash risk when the degree of multinationality increases. Furthermore, MNCs with higher stock market liquidity experience lower crash risk. An important implication is that companies should strengthen their corporate governance and market liquidity while “going global”.
published_date 2022-09-23T04:20:00Z
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score 11.014358

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