Employment Protection Legislation And Stock Crash Risk

As an important economic phenomenon in the capital market,the stock crash has attracted more and more scholars' attention.They start with the formation mechanism and the factors that affect stock crash risk.The research of Chinese scholars at the present stage focuses on the impact of financial statements quality,internal control and information disclosure on stock crash risk,but most of them are studied from the enterprise level.The research on the external environmental system is less,and the impact of the Labor Protection Legislation(EPL)on the risk of stock crash risk is least.Based on the impact of the implementation of the Labor Contract law on the enterprise in 2008,this paper discusses the impact of the level of labor protection on stock crash risk,in order to enrich the research on the microeconomic impact of the Labor Protection Legislation(EPL)in China.Taking the implementation of the Labor Contract Law in 2008 as an opportunity,this paper selects the data of China's A share listed companies for 2002-2016 years as a sample to explore the impact of Labor Protection Level(EPL)on the risk of the stock crash risk,also,considering the influence of the labor intensity on the relationship between the two.After research and analysis,the following conclusions can be drawn:(1)the strengthening of Labor Protection Level(EPL)reduces stock crash risk.The main reason for this result is that the implementation of the Labor Contract Law improves the employee's "bargaining" ability,brings more cost pressure to the enterprise,and promotes the enterprise to change the information disclosure policy and management strategy,and then reduces stock crash risk;(2)the labor intensity of the enterprise will weaken the negative relationship between Labor Protection Level(EPL)and stock crash risk.