Employee social media coverage and expected stock price crash risk: evidence from staggered initiation of employee reviews on Glassdoor
利用Glassdoor上员工评论的分阶段启动，研究发现员工在社交媒体上对公司的覆盖降低了投资者预期的股价崩盘风险，主要通过信息内容和员工赋权两条渠道。
Motivated by employees as an important information source and a governance mechanism, we investigate how employee coverage of a firm on a social media platform (i.e. Glassdoor) affects investors’ perceptions of stock price crash risk. Exploiting the staggered initiation of employee reviews on Glassdoor and adopting a stacked difference-in-differences research design with a propensity score matched sample (PSM-DID), we document an alleviating effect of employee social media coverage on expected crash risk. We confirm both information content and employee empowerment as channels for the effect. Regarding the information content channel, firms with employee disclosure that reveals more negative information or a higher level of management misconduct risk experience a more pronounced effect. For the employee empowerment channel, we document a decline in managerial disclosure opportunism (i.e. earnings management, accounting conservatism, and bad news hoarding) as well as risk-taking (i.e. overinvestment and aggressive tax-avoidance) associated with Glassdoor coverage. Furthermore, the effect is greater for firms with a poorer prior information environment, more informative employee reviews, higher CEO ex ante risk-taking incentives, or weaker external monitoring. Overall, our findings highlight the role of employee social media coverage in shaping managerial behaviours and investor perceptions.