Mitigating industry contagion effects from financial reporting fraud: a competitive dynamics perspective of non-errant rival firms exploiting product-market opportunities

• Main Authors: Kang, Eugene Soon Lee, Thosuwanchot, Nongnapat, Gomulya, David
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2022
• Subjects: Business::General; Contagion; Competitive Dynamics; Financial Reporting Fraud; Available Slack; Resource Deployment
• Online Access: https://hdl.handle.net/10356/160209
• Institution: Nanyang Technological University

Existing studies show that financial reporting frauds by errant firms cause declines in stock market valuations for non-errant rival firms (i.e., industry contagion effects). We posit that contagion effects may be mitigated by investors’ expectations of non-errant rivals exploiting product-market op...