Abstract: In recent years, stock price crashes happened frequently. Under the background of the current economic downturn pressure and unstable capital market, it is of great practical and theoretical significance to explore the governance mechanism of stock price crash risk. Based on the sample of Chinese A-share listed firms between 2008 and 2017, this paper investigates the impact of managerial academic experience on the stock price crash risk, and explores its influencing mechanism. The results show that, managerial academic experience can significantly reduce the stock price crash risk. The results hold when we use Heckman two-stage estimation, PSM approach, and other approaches to address endogeneity concerns. Next, we investigate the possible underlying mechanisms and find that, managerial academic experience reduces the stock price crash risk through both information quality hypothesis and agency problem hypothesis. Further study shows that, compared with the academic experience of other executives, the academic experience of CEO and CFO plays a more significant role in reducing the stock price crash risk. We also find that the effect is more pronounced for firms in a weaker external governance environment, and more pronounced for state-owned enterprises. This study not only has important practical implications for firms on improving the construction of top management team, improving the quality of company information, and alleviating the first type of agency problem, but also has important practical implications on the stable development of capital market in China.

Key words: managerial academic experience, stock price crash risk, information quality, agency problem