Legal Liability and Stock Price Crash Risk: Evidence From a Quasi‐Natural Experiment
利用2001年内华达州公司法改革降低董事和高管法律责任这一准自然实验，发现该改革显著降低了股价崩盘风险，尤其在小公司、年轻公司和治理薄弱公司中，主要机制是减少了盈余管理并提高了信息披露质量。
ABSTRACT We investigate the impact of a 2001 Nevada corporate law reform, which reduced the legal liability of corporate directors and officers, on stock price stability. Our analysis addresses previous conflicting evidence and reveals a significant decrease in stock price crash risk following this legal change, particularly among small, young, and weakly governed firms. We attribute this reduction primarily to diminished earnings management practices and improved quality of corporate information disclosures. Our findings underscore the influence of reduced managerial legal liability on shaping the corporate information landscape and mitigating stock price crash risk.