Abstract
This study proposes the Institutional Parasites Theory (IPT) to explain why innovation-oriented top management teams (TMTs) may drive higher stock price crash risk (SPCR). Rather than blaming individual cognitive biases, IPT highlights systemic institutional flaws—such as regulatory ambiguity—that allow innovation-focused TMTs to hide negative financial information, elevating SPCR. Using data from Chinese A-share firms (2008–2021), the research finds that R&D-driven TMTs are more prone to SPCR, but mechanisms like digital transformation, foreign institutional investors, and CEO political connections act as “institutional antibodies” that moderate these risks. The findings reveal how institutional structures shape risk concealment in innovation-intensive firms and call for stronger institutional safeguards.