This study shows that geopolitical risk (GPR) is associated with a higher risk of a stock price crash. The results are consistent with the argument that geopolitical uncertainty incentivizes management to conceal adverse information. This effect is more pronounced for firms with a greater degree of business internationalization and/or at least one geographical segment in the Middle East. Additional analyses reveal that pure geopolitical threats lead to stock price crashes, whereas adverse geographical events attenuate the likelihood of such crashes. Collectively, our findings reveal the capital market consequences of GPR. 

Keywords: Geopolitical risk; Stock price crash risk