The Impact of Innovation on Stock Price Crash Risk with an Emphasis on Information Asymmetry

The purpose of present study is to investigate the effect of innovation on stock price crash risk with an emphasis on information asymmetry at listed companies in Tehran Stock Exchange. In this regard, 95 companies were selected for the period of 2011-2016 and the regression model of the panel data was used to test of hypotheses. In order to measure innovation, the index of research and development investment and intangible assets and for measuring stock price crash risk the index of stock returns negative skewness coefficient was used to. The results of research hypotheses show that innovation has a negative and significant effect on stock price crash risk. In the sense that innovation will reduce the stock price crash risk in the future. The findings also show that the negative impact of innovation on the stock price crash risk in companies with high information asymmetries is more severe. These results are consistent with the assertion that innovation facilitates the dissemination of information and reduces the likelihood of the publication of bad news.