• Journal of Distribution Science
• /
• v.19 no.1
• /
• pp.27-35
• /
• 2021

Purpose: This study is to investigate the effect of managerial ownership level in distribution and service companies on the stock price crash. The managerial ownership level affects the firm's information disclosure policy. If managers conceal or withholds business-related unfavorable factors over a long period, the firm's stock price is likely to plummet. In a similar vein, management's equity affects information opacity, and information asymmetry affects stock price collapse. Research design, data, and methodology: A regression analysis is conducted using the data on companies listed on the Korea Composite Stock Price Index (KOSPI) between 2012-2017 to examine the effect of the managerial ownership level on stock price crash risks. Results: Logistic and regression results indicate that the stock price crash risk was reduced as managerial ownership levels are increased. The managerial ownership level has a significant negative coefficient on stock price crash risk, negative conditional return skewness of firm-specific weekly return distribution, and asymmetric volatility between positive and negative price-to-earnings ratios. Conclusions: As the ownership and management align, the likeliness of withholding business-related information is reduced. This study's results imply that the stock price crash risk reduces as the managerial ownership level increases because shareholder and manager interests coincide, thereby reducing information asymmetry.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.4
• /
• pp.51-58
• /
• 2020

The study aims to investigate the relationship between hedging with derivatives and subsequent firm-level stock price crash risk. Our sample consists of KOSPI- and KOSDAQ-listed companies from 2004 to 2014. The total firm-year observation is 4,886. We find that hedging with derivatives is related to greater possibilities of crash risk. The results suggest that the complexity of economic and financial reporting for derivatives may aggravate the company's information opacity, ultimately increasing the crash risk. We contribute to the growing body of literature on hedging with derivatives. Academics and practitioners have debated on whether or not hedging enhances transparency or rather makes the information environment more opaque. Theoretical research on the role of corporate hedging on information environment shows that hedging enhances earnings informativeness. Meanwhile, pieces of anecdotal and empirical evidence show that the economic and financial reporting complexity of derivatives can harm information transparency. Our results shed light on the question of whether and how hedging with derivatives affects information environment by examining the relationship between hedging with derivatives and crash risk. Furthermore, our findings provide useful insights for policymakers and practitioners. Specifically, our results raise a need for a more transparent disclosure on corporate hedging activities with derivatives.

• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.1
• /
• pp.143-152
• /
• 2022

This paper examines the relationship between investor sentiment and the risk of a stock price crash at the firm level. Our dataset includes 131 firms listed on the Saudi stock exchange (Tadawul) from 2011 to 2019, as well as 953 firm-year observations. To evaluate crash risk, we employ two distinct proxies and propose an index for measuring firm-level sentiment which we use for the first time in our study. The average turnover rate, price-earnings ratio, and overnight return are the three sentiment proxies we utilize in our index. Our findings show that high levels of investor emotion increase managers' proclivity to withhold unfavorable news from investors, which aggravates the risk of a stock price crash. We undertake cross-sectional regressions by sector to ensure the robustness of our findings, and our findings are confirmed. After accounting for any endogeneity issues with the GMM technique, the results remain the same. Furthermore, we analyze the liquidity effect by dividing our sample into subsamples with better and worse liquidity and find that firms with worse liquidity have a considerably greater positive impact of investor mood. Overall, our findings help investors and regulators recognize the significance of this downside risk and how to manage it in the stock market.

• International Journal of Highway Engineering
• /
• v.13 no.2
• /
• pp.49-56
• /
• 2011

Understanding various casual factors affecting the occurrence of freeway traffic crash is a backbone of deriving effective countermeasures. The first step toward understanding such factors is to identify crash risks on freeways. Unlike existing studies, this study focused on the unsafe vehicle maneuvering that can be detected by in-vehicle sensors. The recent advancement of sensor technologies allows us to gather and analyze detailed microscopic events leading to crash occurrence such as the abrupt change in acceleration. This study used an accelerometer to capture the unsafe events. A set of candidate variables representing unsafe events were derived from analyzing acceleration data obtained by the accelerometer. Then, the crash risk was modeled by the binary logistic regression technique. The probabilistic outcome of crash risk can be provided by the proposed model. An application of the methodology assessing crash risk was presented, and further research items for the successful field implementation were also discussed.

• 한국방재학회:학술대회논문집
• /
• 2008.02a
• /
• pp.513-516
• /
• 2008

The development of crash cushions is finally completed by full-scale vehicle crash tests. Since the current development of crash cushions is achieved by numerous repeated full-scale vehicle crash tests based on empirical and irrational methods, it requires a great amount of costs. In this research, the more rational procedure based on prototype design by static tests and computer simulation is suggested and it can minimize the number of full-scale vehicle crash tests.

• KSCE Journal of Civil and Environmental Engineering Research
• /
• v.40 no.2
• /
• pp.167-175
• /
• 2020

The Two-fluid Model, proposed by Herman and Prigogine in 1979, is a macroscopic model for describing network operability in urban networks. Since the Two-fluid Model parameters change according to the traffic flow characteristics, it is necessary to identify the cause of flow change when analyzing the operability using the parameters. This study compared the crash risk according to rainfall using the Two-fluid Model parameters, and explained that the driving behavior affects the operability of the urban network. The results of the parameters estimation showed poor network operation under rainfall condition. The factors of drivers' crash risk perception model were calculated, and driving behavior was analyzed due to crash risk according to rainfall. In both the morning and evening, drivers tended to slow down their speeds to reduce the crash risk, because the risk on rainy days could be high when the speed was the same as on a sunny days. However, the crash risk was still higher on rainy days than sunny. In the future, it is necessary to analyze the relationship between the network operation and the crash risk in various networks and to improve both.

• The Journal of Industrial Distribution & Business
• /
• v.10 no.12
• /
• pp.35-42
• /
• 2019

Purpose : This study examines The impact of human resource investment in internal control on stock price crash risk. Effective internal control ensures that information provided is complete and accurate, financial statements are reliable. By overseeing management, internal control systems can reduce agency costs between management and outside parties. In Korea, firms have to disclose information about internal control systems. The working experience of human resources in internal control systems is also provided for interested parties. If a firm hires more experienced internal control personnel, it can better facilitate the disclosure of information. Prior studies reported that information asymmetry between managers and investors increases future stock price crash risk. Therefore, the longer working experience internal control personnel have, the lower probability stock crashes have. Research design, data and methodology : This study analyzed the association between the working experience of internal control personnel and crash risk using regression analysis on KOSPI listed companies for fiscal years 2016 through 2017. The sample consists of 1,034 firm-years of non-financial firms whose fiscal year end on December 31. Career spanning data of internal control personnel was collected from internal control reports. The professionalism(IC_EXP) was measured as the logarithm of the average working experience of internal control personnel in months. Negative conditional skewness(NSKEW) and down-to-up volatility (DUVOL) are used to measure firm-specific crash risk. Both measures are based on firm-specific weekly returns derived from the expanded market model. Results : We find that work experience in internal control environment is negatively related to stock price crashes. Specifically, skewness(NSKEW) and volatility (DUVOL) are reduced when firms have longer tenure of human resources in internal control division. The results imply that firms with experienced internal control personnel are less likely to experience stock price crashes. Conclusions : Stock price crashes occur when investors realize that stock prices have been inflated due to information asymmetry. There is a learning effect when internal control processes are done repetitively. Thus, firms with more experienced internal control personnel could manage their internal control more effectively. The results of this study suggest that firms could decrease information asymmetry by investing in human resources for their internal control system.

• Transactions of the Korean Society of Automotive Engineers
• /
• v.21 no.2
• /
• pp.63-71
• /
• 2013

The estimation of occupant injury risk at crash accident is one of the most important assessments for the vehicle crashworthiness performance. The design of safety devices such as occupant restraining system also depend on the kinematics of occupant and its injury risk. The real world in-depth accident investigation provides detailed and realistic information of vehicle damage and occupant injury as well as the accident conditions. This paper introduces a statistical analysis of NASS/CDS database and domestic accident data to correlate speed change, vehicle damage extend, and occupant injury at frontal crash. The maximum crush extend shows a linear relationship with the effective impact speed. The injury risks of the occupant with and without restraining were also respectively quantified with the crush extend. This result can be effectively used for the emergent rescue of crash victims with automatic crash notification system.

• Transactions of the Korean Society of Automotive Engineers
• /
• v.21 no.5
• /
• pp.130-135
• /
• 2013

Until now, passenger airbag design is based on the referred car design and many repetitive crash tests have been done to meet the crash performance. In this paper, it was suggested a new design process of passenger airbag. First, key performance factors were determined by analyzing the injury risk effectiveness of each performance factor. And it was made a relationship between injury risk and performance factor by using the response surface model. By using this one, it can be predicted the injury risk of head and neck. Predicted injury risk of optimal design was obtained through this injury risk prediction model and it was verified by FE analysis result within 18% error of head and 9% error of neck. It was shown that a target crash performance can be met by controlling the key performance factors only.

• The Journal of Industrial Distribution & Business
• /
• v.9 no.7
• /
• pp.53-59
• /
• 2018

Purpose - This study examines the effect of control-ownership wedge on stock crash risk. In Korea, controlling shareholders have exclusive control rights compared to their cash flow rights. With increasing disparity, controlling shareholders abuse their power and extract private benefits at the expense of the minority shareholders. Managers who are controlling shareholders of the companies tend not to disclose critical information that would prevent them from pursuing private interests. They accumulate negative information in the firm. When the accumulated bad news crosses a tipping point, it will be suddenly released to the market at once, resulting in an abrupt decline in stock prices. We predict that stock price crash likelihood due to information opaqueness increases as the wedge increases. Research design, data, and methodology - 831 KOSPI-listed firm-year observations are from KisValue database from 2005 to 2011. Control-ownership wedge is measured as the ratio (UCO -UCF)/UCO where UCF(UCO) is the ultimate cash-flow(control) rights of the largest controlling shareholder. Dependent variable CRASH is a dummy variable that equals one if the firm has at least 1 crash week during a year, and zero otherwise. Logistic regression is used to examine the relationship between control-ownership wedge and stock price crash risk. Results - Using a sample of KOSPI-listed firms in KisValue database for the period 2005-2011, we find that stock price crash risk increases as the disparity increases. Specifically, we find that the coefficient of WEDGE is significantly positive, supporting our prediction. The result implies that as controlling shareholders' ownership increases, controlling shareholders tend to withhold bad news. Conclusions - Our results show that agency problems arising from the divergence between control rights and cash flow rights increase the opaqueness of accounting information. Eventually, the accumulated bad news is released all at once, leading to stock price crashes. It could be seen that companies with high control-ownership wedge are likely to experience future stock price crashes. Our study is related to a broader literature that examined the effect of the control-ownership wedge on stock markets. Our findings suggest that the disparity is a meaningful predictor for future stock price crash risk. The results are expected to provide useful implications for firms, regulators, and investors.