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Government debt and stock price crash risk: International Evidence

Hamdi Ben-Nasr, Sabri Boubaker Orcid Logo

Journal of Financial Stability, Volume: 72, Start page: 101245

Swansea University Author: Sabri Boubaker Orcid Logo

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DOI (Published version): 10.1016/j.jfs.2024.101245

Abstract

We add to the literature on the economic outcomes of government debt and argue that government debt increases crash risk via two channels: (i) hoarding bad news and (ii) tax avoidance. Based on a large international sample, our results indicate that stock crash risk is positively associated with gov...

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Published in: Journal of Financial Stability
ISSN: 1572-3089
Published: Elsevier BV 2024
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URI: https://cronfa.swan.ac.uk/Record/cronfa67520
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first_indexed 2024-10-30T13:18:44Z
last_indexed 2024-10-30T13:18:44Z
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spelling v2 67520 2024-09-02 Government debt and stock price crash risk: International Evidence 43999fff86cd8a29f4815fb4dfa47729 0000-0002-6416-2952 Sabri Boubaker Sabri Boubaker true false 2024-09-02 CBAE We add to the literature on the economic outcomes of government debt and argue that government debt increases crash risk via two channels: (i) hoarding bad news and (ii) tax avoidance. Based on a large international sample, our results indicate that stock crash risk is positively associated with government debt. Our conclusions are robust when we treat endogeneity issues, and our tests confirm the validity of bad news hoarding and tax avoidance as channels through which government debt influences stock price crash risk. Journal Article Journal of Financial Stability 72 101245 Elsevier BV 1572-3089 Government debt; Fiscal policy uncertainty; Bad news hoarding; Tax avoidance; Crash risk 1 6 2024 2024-06-01 10.1016/j.jfs.2024.101245 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Hamdi Bennasr would like to acknowledge financial support from Qatar University through the grant ID: QUST-1-CBE-2023-965. 2024-10-30T13:20:55.4506221 2024-09-02T15:18:17.7484198 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Hamdi Ben-Nasr 1 Sabri Boubaker 0000-0002-6416-2952 2 67520__32795__a11282d7e7784ee997ca6dac05e63844.pdf 67520.VoR.pdf 2024-10-30T13:19:15.7246686 Output 558529 application/pdf Version of Record true Crown Copyright © 2024. This is an open access article under the CC BY license. true eng http://creativecommons.org/licenses/by/4.0/
title Government debt and stock price crash risk: International Evidence
spellingShingle Government debt and stock price crash risk: International Evidence
Sabri Boubaker
title_short Government debt and stock price crash risk: International Evidence
title_full Government debt and stock price crash risk: International Evidence
title_fullStr Government debt and stock price crash risk: International Evidence
title_full_unstemmed Government debt and stock price crash risk: International Evidence
title_sort Government debt and stock price crash risk: International Evidence
author_id_str_mv 43999fff86cd8a29f4815fb4dfa47729
author_id_fullname_str_mv 43999fff86cd8a29f4815fb4dfa47729_***_Sabri Boubaker
author Sabri Boubaker
author2 Hamdi Ben-Nasr
Sabri Boubaker
format Journal article
container_title Journal of Financial Stability
container_volume 72
container_start_page 101245
publishDate 2024
institution Swansea University
issn 1572-3089
doi_str_mv 10.1016/j.jfs.2024.101245
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description We add to the literature on the economic outcomes of government debt and argue that government debt increases crash risk via two channels: (i) hoarding bad news and (ii) tax avoidance. Based on a large international sample, our results indicate that stock crash risk is positively associated with government debt. Our conclusions are robust when we treat endogeneity issues, and our tests confirm the validity of bad news hoarding and tax avoidance as channels through which government debt influences stock price crash risk.
published_date 2024-06-01T13:20:53Z
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score 11.03559

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