Strategy uniqueness and stock price crash risk

This paper examines how corporate strategy uniqueness influences stock price crash risk. Using portfolio analyses and panel regressions, we find that firms pursuing more unique strategies exhibit significantly lower crash risk. Channel analyses suggest that strategically unique firms face lower competitive pressure and weaker incentives to withhold bad news, thereby mitigating crash risk. Cross-sectional results further indicate that this negative relationship is stronger among firms with greater information asymmetry and weaker corporate governance. Overall, our findings provide important evidence on the role of corporate strategy in shaping firms’ downside tail risk.