State control and stock price crash risk: new evidence of the conservatism of state-owned enterprises

IF 1.8 Q2 BUSINESS, FINANCE

International Journal of Managerial Finance Pub Date : 2022-09-08 DOI:10.1108/ijmf-08-2021-0373

Feng Xie, H. Anderson, J. Chi, Jing Liao

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Abstract

PurposeThis paper examines the impact of state control on stock price crash risk given whether and how ownership structure affects stock price crash risk is relatively underexplored.Design/methodology/approachThe sample includes 2,285 Chinese firms listed in the Shanghai and Shenzhen Stock Exchanges. Panel data is used for conducting the analysis and endogeneity is addressed with instrumental variable estimation and by testing how stock price crash risk is affected when the ultimate controller changes from a private-owned company to a state-owned enterprise.FindingsThe authors find that state control is negatively associated with future stock price crash risk. The mechanism analysis shows that state control reduces stock price crash risk through the implementation of conservative corporate policies. Furthermore, the impact of state control is more pronounced with more intensive state involvement, e.g. in strategic industries and when a company's ultimate controller is a non-corporate government agency or the central government.Originality/valueThis paper enriches the literature on the controversy of the role of state control and the results of this study highlight the importance of the conservatism of state control on reducing stock return tail risk. The authors also add to the literature on the importance of the policy-risk sharing effect of state ownership.

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国家控制与股价崩盘风险：国有企业稳健性的新证据

鉴于股权结构是否以及如何影响股价暴跌风险的研究相对较少，本文考察了国家控制对股价暴跌风险产生的影响。设计/方法/方法样本包括2285家在上海和深圳证券交易所上市的中国公司。使用面板数据进行分析，并通过工具变量估计和测试当最终控制者从私营公司转变为国有企业时，股价暴跌风险如何受到影响来解决内生性问题。研究结果作者发现，国家控制与未来股价暴跌风险呈负相关。机制分析表明，国家控制通过实施保守的公司政策来降低股价暴跌风险。此外，国家控制的影响在国家参与更密集的情况下更为明显，例如在战略性行业，以及当公司的最终控制者是非公司政府机构或中央政府时。原创性/价值本文丰富了关于国家控制作用争议的文献，本研究的结果突出了国家控制的保守性对降低股票收益尾部风险的重要性。作者还补充了关于国家所有制政策风险分担效应重要性的文献。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Managerial Finance BUSINESS, FINANCE-

CiteScore

4.10

自引率

0.00%

发文量

期刊介绍： Treasury and Financial Risk Management ■Redefining, measuring and identifying new methods to manage risk for financing decisions ■The role, costs and benefits of insurance and hedging financing decisions ■The role of rating agencies in managerial decisions Investment and Financing Decision Making ■The uses and applications of forecasting to examine financing decisions measurement and comparisons of various financing options ■The public versus private financing decision ■The decision of where to be publicly traded - including comparisons of market structures and exchanges ■Short term versus long term portfolio management - choice of securities (debt vs equity, convertible vs non-convertible)

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