Inefficient Investment,Media Concern And Stock Price Crash Risk

Stock price crash refers to the phenomenon that the stock price of listed companies does not match the whole stock market in a short period of time.The risk of stock price crash is to measure the possibility of this phenomenon in the future.The collapse of stock price is not conducive to the optimal' allocation of resources,thus damaging the value of the entire company and the interests of shareholders,hindering the development of the real economy,and even seriously shaking the confidence of investors,causing panic in the entire capital market.Especially in recent years,the phenomenon of stock price collapse in China's capital market is numerous,and the phenomenon of stock price collapse in GEM listed companies is particularly obvious.The stability of 'the stock price is of great significance for enhancing the confidence of shareholders and promoting the development of capital market.Thus,it is practically meaningful to research the internal and external factors of the stock price crash risk of GEM listed companies,so as to avoid the risk appropriately.Based on the above background,this paper takes the data of GEM listed companies from 2012 to 2019 as a sample.From the perspective of inefficient investment behavior inside the company and the degree of media concern outside the company,the paper studies the influence of the behavior on the risk of stock price crash.At the same time,it further explores the influence of media concern on the relationship between inefficient investment and the risk of stock price collapse.The conclusions as follows:First,inefficient investment is positively correlated with the risk of stock price crash risk,that means the higher the level of inefficient investment,the greater the risk of collapse in the company's share price.Second,media concern has a negative correlation with the risk of stock price crash risk,that means the more media attention the gem listed companies receive,the lower the risk of share price crash.Third,media concern plays a significant moderating role in the positive impact of inefficient investment on the risk of stock price crash risk.This is because for the sake of personal interests,managers hide the negative effects of inefficient investments from shareholders.When the amount of negative news reached the ceiling,it would explode,eventually triggering a collapse in share prices.At this time,the higher the degree of media concern,the more effectively it can play the function of information transmission and external supervision,so as to inhibit the positive impact of inefficient investment on the risk of stock price crash.The main contributions show as below:First,it probes into the important effects of inefficient investment behavior and media attention on the stability of stock price,but also put the enterprise and the media under the same framework to study the influence of its cross relation on the risk of stock.price crash,thus enriches the formation mechanism and influencing factors of stock price crash risk in theory.Second,compared with the main board market,the GEM,with high growth as well as high P/E ratio,has more significant investment instability,so the stock price crash is more likely to happen.Therefore,this paper,from the perspective of GEM listed companies,discusses the role of internal and external factors on the risk of stock price collapse,so as to enrich the relevant research results of GEM listed companies.Third,the paper discusses how to more effectively reduce the level of individual share price collapse risk and to further maintain the stability of the capital market and has a certain reference value,including effectively reducing the efficiency of investment level,and ensuring that the media plays a positive role as an external governance mechanisms under the guidance of related regulators.