Press freedom and stock price crash risk
基于52个经济体2002-2021年数据，发现新闻自由能通过抑制坏消息隐藏、加强公司治理来降低未来股价崩盘风险，对投资者和监管者有参考价值。
• This paper examines the impact of press freedom on stock price crash risk around the world. • The level of press freedom is negatively associated with future stock price crash risk. • The negative relationship is driven by a collective influence from multiple dimensions of press freedom. • Firms in press free economies exhibit stronger corporate governance. • Firms in press free economies show lower levels of firm-specific and long-term overvaluation 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.