Market Competition and Stock Collapse Risk

Abstract

This article takes the 2005-2015 Shanghai and Shenzhen A share listed companies as a research sample, investigating the impact of market competition and corporate governance quality on stock market collapse risk. The study found that corporate governance quality is negatively correlated with stock collapse risk, and market competition intensity is negatively correlated with stock collapse risk. At the same time, when the quality of corporate governance is low, fierce market competition can reduce the possibility of the company's stock collapse risk. The conclusion of this study means that in China, at present, it is necessary to continuously improve the internal governance structure of the company, further open market access, and strengthen market competition in the industry, so as to prevent and reduce the risk of stock collapse.