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- Publisher Website: 10.1080/09638180.2022.2130954
- WOS: WOS:000869534900001
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Article: Enterprise Resource Planning System Usage and Stock Price Crash Risk
Title | Enterprise Resource Planning System Usage and Stock Price Crash Risk |
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Authors | |
Issue Date | 2022 |
Citation | European Accounting Review, 2022, Forthcoming How to Cite? |
Abstract | We examine whether Enterprise Resource Planning system (ERP) usage affects the stock price crash risk of Chinese firms, and whether the effect differs between state-owned enterprises (SOEs) and non-SOEs. We find that ERP usage is associated with lower stock price crash risk, but this pattern is largely concentrated in non-SOEs, consistent with our arguments that more acute shareholder-manager agency problem and more organizational rigidity can inhibit the successful assimilation of ERP. The results are further confirmed by a difference-in-differences analysis exploiting the privatization of SOEs as a negative shock to their shareholder-manager agency problem and organizational rigidity. Three channels help explain why ERP usage helps lower stock price crash risk: it improves the quality of internal control, reduces the chance of financial restatements, and mitigates information asymmetry, and all effects are concentrated in non-SOEs. Our study is among the first to examine how ERP usage affects stock price crash risk – an overall outcome measure of a firm's information environment. Using SOEs vs. non-SOEs as a powerful measure of the shareholder-manager agency problem and organizational rigidity, it also represents the first test of the moderating effect of agency problem and organizational rigidity on the effectiveness of ERP usage. |
Persistent Identifier | http://hdl.handle.net/10722/320793 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Cao, F | - |
dc.contributor.author | Sun, J | - |
dc.contributor.author | Yuan, R | - |
dc.contributor.author | Zou, H | - |
dc.date.accessioned | 2022-11-01T04:41:19Z | - |
dc.date.available | 2022-11-01T04:41:19Z | - |
dc.date.issued | 2022 | - |
dc.identifier.citation | European Accounting Review, 2022, Forthcoming | - |
dc.identifier.uri | http://hdl.handle.net/10722/320793 | - |
dc.description.abstract | We examine whether Enterprise Resource Planning system (ERP) usage affects the stock price crash risk of Chinese firms, and whether the effect differs between state-owned enterprises (SOEs) and non-SOEs. We find that ERP usage is associated with lower stock price crash risk, but this pattern is largely concentrated in non-SOEs, consistent with our arguments that more acute shareholder-manager agency problem and more organizational rigidity can inhibit the successful assimilation of ERP. The results are further confirmed by a difference-in-differences analysis exploiting the privatization of SOEs as a negative shock to their shareholder-manager agency problem and organizational rigidity. Three channels help explain why ERP usage helps lower stock price crash risk: it improves the quality of internal control, reduces the chance of financial restatements, and mitigates information asymmetry, and all effects are concentrated in non-SOEs. Our study is among the first to examine how ERP usage affects stock price crash risk – an overall outcome measure of a firm's information environment. Using SOEs vs. non-SOEs as a powerful measure of the shareholder-manager agency problem and organizational rigidity, it also represents the first test of the moderating effect of agency problem and organizational rigidity on the effectiveness of ERP usage. | - |
dc.language | eng | - |
dc.relation.ispartof | European Accounting Review | - |
dc.title | Enterprise Resource Planning System Usage and Stock Price Crash Risk | - |
dc.type | Article | - |
dc.identifier.email | Zou, H: hongzou@hku.hk | - |
dc.identifier.authority | Zou, H=rp01800 | - |
dc.identifier.doi | 10.1080/09638180.2022.2130954 | - |
dc.identifier.hkuros | 341130 | - |
dc.identifier.volume | Forthcoming | - |
dc.identifier.isi | WOS:000869534900001 | - |