Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307947 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Business Economics [ISSN:] 1861-8928 [Volume:] 92 [Issue:] 9 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2022 [Pages:] 1455-1489
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
In this study, we examine whether and how managers' intentions to raise equity are associated with future stock price crash risk. Therefore, we apply modern information retrieval techniques to corporate textual disclosures by constructing document embeddings that preserve contextual relationships in managers' discussions on liquidity and capital resources. Using these document embeddings, we construct a continuous measure of managers' intentions to raise equity. We document that the search for equity is associated with higher future stock price crash risk. Further analyses suggest that managers with stronger intentions to raise equity are more likely to block negative news flow and that these intentions reinforce the effects of earnings manipulation and textual obfuscation on stock price crash risk. In summary, our results suggest that managers' search for equity incentivises managerial bad news hoarding.
Subjects: 
Stock price crash risk
Information opacity
Agency theory
Natural language processing
Textual disclosures
Equity finance
Information retrieval
JEL: 
G12
G14
G32
M41
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version

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