Artificial intelligence innovation and stock price crash risk

Authors

Junru Zhang, Edith Cowan UniversityFollow
Chen Cui
Chen Zheng
Grantley Taylor

Document Type

Journal Article

Publication Title

Journal of Financial Research

Publisher

Wiley

School

School of Business and Law

RAS ID

70407

Comments

Zhang, J., Cui, C., Zheng, C., & Taylor, G. (2024). Artificial intelligence innovation and stock price crash risk. Journal of Financial Research. Advance online publication. https://doi.org/10.1111/jfir.12424

Abstract

This study examines the association between artificial intelligence innovation (AII) and stock price crash risk (SPCR). AII serves as a governance mechanism that can bolster strength in internal controls, leading to increased financial transparency and thereby reducing the likelihood of future SPCR. The results hold after accounting for possible endogeneity issues Further, we find that monitoring through corporate governance mechanisms, level of following by equity analysts, and the reduced information asymmetry constitute important channels that mediate the association between AII and SPCR. Additionally, the relationship between AII and SPCR varies across corporate life cycle stages and workplace culture.

DOI

10.1111/jfir.12424

Creative Commons License

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