Firm Life Cycle and Stock Price Crash and Jump Risk

Document Type : applied

Authors

1 Associate Prof. Accounting Department, Islamic Azad University, Tabriz, Iran

2 Ph.D. Candidate Accounting, Islamic Azad University, Marand, Iran

Abstract

Corporate life cycle represents the evolution of an organization due to changes such as strategy and competitive pressures the corporate is facing, happens.based on the theory of competition and signaling theory, firms during different stages of their life cycle have different characteristics and conditions that may affect stock price crash and jump risk. The aim of this research is to investigate the relationship between firm life cycle and stock price crash and jump risk. In order to achieve this research goal, were selected 144 firms during the 2010 to 2015 we used log it leggresion to test our hypothesis.The results showed that there is not relationship between firm growth and mature stages and stock price crash risk and there is negative and significant relationship between firm decline stage and stock price crash risk. Also, there is not relationship between firm life cycle stages and stock price jump risk in the research.
JEL: D91, E32
How to cite this paper: Badavar Nahandi, Y., & Dadashzadeh, Gh. (2017). Firm Life Cycle and Stock Price Crash and Jump Risk. Quarterly Journal of Risk Modeling and Financial Engineering, 2(1), 98 –114. (In Persian)

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References

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