This study reveals the inconsistencies between the negative externalities of carbon emissions and the recognition condition of accounting statements.Hence,the study identifies that heavily polluting enterprises in Chi...This study reveals the inconsistencies between the negative externalities of carbon emissions and the recognition condition of accounting statements.Hence,the study identifies that heavily polluting enterprises in China have severe off-balance sheet carbon reduction risks before implementing the carbon emission trading system(CETS).Through the staggered difference-in-difference(DID)model and the propen-sity score matching-DID model,the impact of CETS on reducing the risk of stock price crashes is examined using data from China’s A-share heavily polluting listed companies from 2007 to 2019.The results of this study are as follows:(1)CETS can significantly reduce the risk of stock price crashes for heavily polluting companies in the pilot areas.Specifically,CETS reduces the skewness(negative conditional skewness)and down-to-up volatility of the firm-specific weekly returns by 8.7%and 7.6%,respectively.(2)Heterogeneity analysis further shows that the impacts of CETS on the risk of stock price crashes are more significant for heavily polluting enterprises with the bear market condition,short-sighted management,and intensive air pollution.(3)Mechanism tests show that CETS can reduce analysts’coverage of heavy polluters,reducing the risk of stock price crashes.This study reveals the role of CETS from the stock price crash risk perspective and helps to clarify the relationship between climatic risk and corporate financial risk.展开更多
This paper used the A-shares listed companies in China as samples,constructed a comprehensive indicator of investor attention,and conducted an empirical analysis on the correlations among investor attention,analyst op...This paper used the A-shares listed companies in China as samples,constructed a comprehensive indicator of investor attention,and conducted an empirical analysis on the correlations among investor attention,analyst optimism,and stock price crash risk.The results indicated that investor attention aggravates the stock price crash risk and has a positive effect on analyst optimism.Meanwhile,the analyst optimism plays a mediating role in the positive correlation between investor attention and stock price crash risk.In addition to that,institutional investor attention also has direct and indirect effects on the crash risk.展开更多
We investigate how a firm’s corporate pledgeable asset ownership(CPAO)affects the risk of future stock price crashes.Using pledgeable asset ownership and crash risk data for a large sample of U.S.firms,we provide nov...We investigate how a firm’s corporate pledgeable asset ownership(CPAO)affects the risk of future stock price crashes.Using pledgeable asset ownership and crash risk data for a large sample of U.S.firms,we provide novel empirical evidence that a firm’s risk of a future stock price crash decreases with an increase in its pledgeable assets.Our main findings are valid after conducting various robustness tests.Further channel tests reveal that firms with pledgeable assets increase their collateral value,thereby enhancing corporate transparency and limiting bad news hoarding,resulting in lower stock price crash risk.Overall,the results show that having more pledgeable assets enables easier access to external financing,making it less likely that managers will hoard bad news.展开更多
This paper investigates whether religious traditions influence firm-specific crash risk in China.Using a sample of A-share listed firms from 2003 to 2013,we provide evidence that the more intense the religious environ...This paper investigates whether religious traditions influence firm-specific crash risk in China.Using a sample of A-share listed firms from 2003 to 2013,we provide evidence that the more intense the religious environment,the lower the stock price crash risk,implying that religion plays an important role in Chinese corporate governance.Further,we find that(1) religion affects stock price crash risk by reducing earnings management and the management perk problem;(2) different religions have different effects,and Taoism,in particular,is unrelated to crash risk; and(3) the effects of religion are more pronounced with higher quality corporate governance and a stronger legal environment.Religion constrains the management agency problem,thus reducing stock price crash risk in China.Our paper enriches the literature on stock price crash risk and religion,and on new economic geography.展开更多
Although several studies have examined the economic consequences of large shareholders' tunneling behavior, little attention has been paid to the negative effects of tunneling on firms' extreme events. In this artic...Although several studies have examined the economic consequences of large shareholders' tunneling behavior, little attention has been paid to the negative effects of tunneling on firms' extreme events. In this article, we investigate how tunneling behavior affects firm-level stock price crashes. The findings indicate that the probability of stock price crashes is positively associated with the extent of tunneling behavior by large shareholders. The positive relationship is more pronounced after the split of share structure reform and is moderated by the firm's financial conditions. This study contributes to the emerging body of literature focusing on the economic consequences of tunneling and stock price crashes. The conclusions drawn from the study also provide a frame of reference for investor protection and investment portfolios based on large shareholders' tunneling behavior in China.展开更多
Stock price crashes damage China’s macro-financial stability,restrict economic growth,and can lead to huge losses in wealth for investors.Therefore,how to reduce the risk for stock price crashes is an important theor...Stock price crashes damage China’s macro-financial stability,restrict economic growth,and can lead to huge losses in wealth for investors.Therefore,how to reduce the risk for stock price crashes is an important theoretical and practical issue.This paper mainly studies the effects of the institutional environment that creates risks for stock price crashes.Using China’s non-financial A-share listed companies from 1997 to 2012 as an example,this paper finds that the lower the level of government intervention is,the better the legal environment is,the faster the market process in business area is,then the lower the risks for stock price crashes will be.To solve the endogenous problem between the institutional environment and the risk of a stock price crash,this paper uses the number of seaports and whether the commercial ports or leased territories are opened after the first Opium War in Qing Dynasty as instrumental variables of the institutional environment.We find that the above conclusion is still valid with the method of 2SLS regression.Furthermore,this paper also finds that the government intervention index,the legal environment index,and the market index are negatively related to stock price synchronicity to a significant degree.These conclusions illustrate that the institutional environment is an important factor in the healthy and stable development of the capital market,which has important implications for policy markers or regulators to develop policies to promote the stable development of the stock market,to control market risk of listed companies,and to make investment decisions.展开更多
基金supports from the National Natural Science Foundation of China(under Grants No.72073105,71903002,and 71774122)the Natural Science Foundation of Anhui Province,China(under Grant No.1908085QG309)are greatly acknowledged.
文摘This study reveals the inconsistencies between the negative externalities of carbon emissions and the recognition condition of accounting statements.Hence,the study identifies that heavily polluting enterprises in China have severe off-balance sheet carbon reduction risks before implementing the carbon emission trading system(CETS).Through the staggered difference-in-difference(DID)model and the propen-sity score matching-DID model,the impact of CETS on reducing the risk of stock price crashes is examined using data from China’s A-share heavily polluting listed companies from 2007 to 2019.The results of this study are as follows:(1)CETS can significantly reduce the risk of stock price crashes for heavily polluting companies in the pilot areas.Specifically,CETS reduces the skewness(negative conditional skewness)and down-to-up volatility of the firm-specific weekly returns by 8.7%and 7.6%,respectively.(2)Heterogeneity analysis further shows that the impacts of CETS on the risk of stock price crashes are more significant for heavily polluting enterprises with the bear market condition,short-sighted management,and intensive air pollution.(3)Mechanism tests show that CETS can reduce analysts’coverage of heavy polluters,reducing the risk of stock price crashes.This study reveals the role of CETS from the stock price crash risk perspective and helps to clarify the relationship between climatic risk and corporate financial risk.
文摘This paper used the A-shares listed companies in China as samples,constructed a comprehensive indicator of investor attention,and conducted an empirical analysis on the correlations among investor attention,analyst optimism,and stock price crash risk.The results indicated that investor attention aggravates the stock price crash risk and has a positive effect on analyst optimism.Meanwhile,the analyst optimism plays a mediating role in the positive correlation between investor attention and stock price crash risk.In addition to that,institutional investor attention also has direct and indirect effects on the crash risk.
基金supported by Institute for Information and communications Technology Planning and Evaluation(IITP)grant funded by the Korea government(MSIT)(No.2017-0-01779,A machine learning and statistical inference frame-work for explainable artificial intelligence).
文摘We investigate how a firm’s corporate pledgeable asset ownership(CPAO)affects the risk of future stock price crashes.Using pledgeable asset ownership and crash risk data for a large sample of U.S.firms,we provide novel empirical evidence that a firm’s risk of a future stock price crash decreases with an increase in its pledgeable assets.Our main findings are valid after conducting various robustness tests.Further channel tests reveal that firms with pledgeable assets increase their collateral value,thereby enhancing corporate transparency and limiting bad news hoarding,resulting in lower stock price crash risk.Overall,the results show that having more pledgeable assets enables easier access to external financing,making it less likely that managers will hoard bad news.
基金supported by the National Natural Science Foundation of China(Project Nos.7137215171502040+1 种基金715702041971332004)
文摘This paper investigates whether religious traditions influence firm-specific crash risk in China.Using a sample of A-share listed firms from 2003 to 2013,we provide evidence that the more intense the religious environment,the lower the stock price crash risk,implying that religion plays an important role in Chinese corporate governance.Further,we find that(1) religion affects stock price crash risk by reducing earnings management and the management perk problem;(2) different religions have different effects,and Taoism,in particular,is unrelated to crash risk; and(3) the effects of religion are more pronounced with higher quality corporate governance and a stronger legal environment.Religion constrains the management agency problem,thus reducing stock price crash risk in China.Our paper enriches the literature on stock price crash risk and religion,and on new economic geography.
基金We thank two anonymous referees and the editor who greatly improved the paper. Helpful comments were obtained from Xiangqin Qi, Fu Xin, Wei Xu, and Zhenye Yao from the seminars at Nanjing University. We acknowledge financial support from National Natural Science Foundation of China (Grant No. 71372032, 71302036 and 71272238) and the National Social Science Foundation (Grant No. 11AJL003). Errors remain our own.
文摘Although several studies have examined the economic consequences of large shareholders' tunneling behavior, little attention has been paid to the negative effects of tunneling on firms' extreme events. In this article, we investigate how tunneling behavior affects firm-level stock price crashes. The findings indicate that the probability of stock price crashes is positively associated with the extent of tunneling behavior by large shareholders. The positive relationship is more pronounced after the split of share structure reform and is moderated by the firm's financial conditions. This study contributes to the emerging body of literature focusing on the economic consequences of tunneling and stock price crashes. The conclusions drawn from the study also provide a frame of reference for investor protection and investment portfolios based on large shareholders' tunneling behavior in China.
文摘Stock price crashes damage China’s macro-financial stability,restrict economic growth,and can lead to huge losses in wealth for investors.Therefore,how to reduce the risk for stock price crashes is an important theoretical and practical issue.This paper mainly studies the effects of the institutional environment that creates risks for stock price crashes.Using China’s non-financial A-share listed companies from 1997 to 2012 as an example,this paper finds that the lower the level of government intervention is,the better the legal environment is,the faster the market process in business area is,then the lower the risks for stock price crashes will be.To solve the endogenous problem between the institutional environment and the risk of a stock price crash,this paper uses the number of seaports and whether the commercial ports or leased territories are opened after the first Opium War in Qing Dynasty as instrumental variables of the institutional environment.We find that the above conclusion is still valid with the method of 2SLS regression.Furthermore,this paper also finds that the government intervention index,the legal environment index,and the market index are negatively related to stock price synchronicity to a significant degree.These conclusions illustrate that the institutional environment is an important factor in the healthy and stable development of the capital market,which has important implications for policy markers or regulators to develop policies to promote the stable development of the stock market,to control market risk of listed companies,and to make investment decisions.