ScholarWorks@중앙대학교

초록

We examine how institutional investors mitigate stock price cash risks arising from managers' deliberate concealment and accumulation of negative corporate information. Our study focuses on how institutional monitoring, based on investors' nationalities, affects crash risk. The results show that firms with greater holdings by both domestic and foreign institutional investors are less susceptible to extreme negative price movements. This mitigating effect strengthens when institutional investors are more independent (compared with gray institutional investors). Furthermore, domestic investors exert more effective oversight in opaque firms with high information asymmetry, while foreign investors demonstrate stronger influence in transparent settings where lower information barriers reduce monitoring costs. Collectively, the study enhances understanding of how institutional ownership constrains agency-driven managerial behavior and uncovers the distinct governance roles of domestic and foreign investors in moderating stock price crash risk.

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