Open AccessOPAQUE FINANCIAL REPORTS AND STOCK PRICE CRASH RISK IN INDONESIA
Author(s) -
Lukas Purwoto,
Eduardus Tandelilin
Publication year - 2014
Publication title -
manajemen dan bisnis/manajemen dan bisnis
Language(s) - English
Resource type - Journals
eISSN - 2477-1783
pISSN - 1412-3789
DOI - 10.24123/jmb.v13i1.237
Subject(s) - crash , business , corporate governance , stock price , stock (firearms) , finance , accounting , actuarial science , geography , computer science , paleontology , series (stratigraphy) , biology , programming language , archaeology
Stock price crash risk is explained in perspective of corporate governance which refers to the lack of information disclosure. This research investigates the effects of opaque financial reports on stock price crash risk of Indonesia-listed firms from 2005 to 2008.The results show that the degree of crash risk is high. Analyses of binary outcome models, which are controlled by company characteristics, show that crash risk is higher in firms with more opaque financial reports. These results of analysis validate the findings of Hutton et al. (2009) so consistent that insiders or managers hide bad news or negative information when submitting poor financial reports.