Prospector and Defender Business strategy, Information Asymmetry, and Stock Price Crash
Author(s):
Abstract:
Firms must follow a business strategy for success in the competition. There are two proposed strategies of Prospector and Defender firms. Defenders aims in decreasing costs and prices, however, prospectors conduct innovation and high level of R&D expenditures and try to differentiate their product from competitors. But this approach increase future Stock Price Crash, because one of causes can lead the firm to crash risk is bad news hoarding within the firm. With issuing the bad news, stock price experiences crash suddenly.
This paper examines empirically the effect of firm-level business strategies on future stock price crash risk. In the mean time, it is expected in the higher asymmetry information condition, prospect strategy increase crash risk more. To achieve the researchs goals, we selected 117 firms listed in Tehran Stock Exchange as a sample during 2011-2015. To examine research hypotheses we employed multivariate regression with panel data. The finding indicate prospect strategy increase crash risk, however, defend strategy will decrease it. We also found that in the higher asymmetry information condition, prospectors are more prone to increases future crash risk.
This paper examines empirically the effect of firm-level business strategies on future stock price crash risk. In the mean time, it is expected in the higher asymmetry information condition, prospect strategy increase crash risk more. To achieve the researchs goals, we selected 117 firms listed in Tehran Stock Exchange as a sample during 2011-2015. To examine research hypotheses we employed multivariate regression with panel data. The finding indicate prospect strategy increase crash risk, however, defend strategy will decrease it. We also found that in the higher asymmetry information condition, prospectors are more prone to increases future crash risk.
Keywords:
Language:
Persian
Published:
Financial Engineering and Protfolio Management, Volume:8 Issue: 31, 2017
Pages:
75 to 94
magiran.com/p1725873
دانلود و مطالعه متن این مقاله با یکی از روشهای زیر امکان پذیر است:
اشتراک شخصی
با عضویت و پرداخت آنلاین حق اشتراک یکساله به مبلغ 1,390,000ريال میتوانید 70 عنوان مطلب دانلود کنید!
اشتراک سازمانی
به کتابخانه دانشگاه یا محل کار خود پیشنهاد کنید تا اشتراک سازمانی این پایگاه را برای دسترسی نامحدود همه کاربران به متن مطالب تهیه نمایند!
توجه!
- حق عضویت دریافتی صرف حمایت از نشریات عضو و نگهداری، تکمیل و توسعه مگیران میشود.
- پرداخت حق اشتراک و دانلود مقالات اجازه بازنشر آن در سایر رسانههای چاپی و دیجیتال را به کاربر نمیدهد.
In order to view content subscription is required
Personal subscription
Subscribe magiran.com for 70 € euros via PayPal and download 70 articles during a year.
Organization subscription
Please contact us to subscribe your university or library for unlimited access!