Selected article for: "association risk and increase risk"

Author: Huang, Zhi-xiong; Tang, Qi; Huang, Siming
Title: Foreign investors and stock price crash risk: Evidence from China
  • Cord-id: dblfa6c1
  • Document date: 2020_9_29
  • ID: dblfa6c1
    Snippet: This study examines whether and how foreign investors affect firm-specific crash risk. Based on China’s stock market, we show that foreign investors significantly increase stock price crash risk and the positive association is more pronounced in firms with high levels of information asymmetry or efficient internal control. We address endogeneity issue using a quasi-natural experiment, namely, the revision of Foreign Investment Industrial Guidance Catalog in 2011, and results still hold. Overal
    Document: This study examines whether and how foreign investors affect firm-specific crash risk. Based on China’s stock market, we show that foreign investors significantly increase stock price crash risk and the positive association is more pronounced in firms with high levels of information asymmetry or efficient internal control. We address endogeneity issue using a quasi-natural experiment, namely, the revision of Foreign Investment Industrial Guidance Catalog in 2011, and results still hold. Overall, this study provides policy implications on the effect of foreign investor in emerging capital markets.

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