The Research Of Relationship Between Strategic Change And Stock Price Crash Risk In Family Business Inheritance

As the most widely distributed organization in the world,family business plays an important role in both developed and developing countries.With the rapid development of China's economy,family enterprises have played a very important role in China's GDP,taxation,export and employment.At the same time,many family businesses are experiencing or are about to face the problem of succession,and the change of management is often accompanied by strategic changes.With the increase of operational risks,it is likely to increase the risk of stock price crash,which is not conducive to the stable and healthy development of the capital market.Based on the above background,it is of great theoretical and practical significance to conduct research on the strategic change and stock price crash risk in family business inheritance to promote the development of family business,reduce financial risks and promote the stable and healthy development of China's capital market.Based on literature review and theoretical analysis,this paper explores the correlation between strategic change and stock price crash risk in family business inheritance through empirical research.This paper defines the succession of family business by whether the chairman of the board of directors of the listed family business changes,and measures the size of strategic change by the text similarity before and after the chapter "management discussion and analysis" in the annual report.The greater the text similarity is,the smaller the degree of strategic change will be.In the calculation of text similarity,this paper uses Python language,TFIDF and cosine similarity,and uses regression to find the correlation between strategic change and stock price crash risk in family business inheritance.Secondly,as a kind of social capital,political connection can help enterprises to obtain the effect of property right protection and the effect of government favoritism.If the managers of family enterprises have political connection,on the one hand,it can help them to obtain scarce resources.On the other hand,it may reduce the operating cost of enterprises.Therefore,this paper will study whether political association has an impact on the correlation between strategic change and stock price crash risk in family business inheritance.In addition,after the succession and strategic reform of family businesses,on the one hand,the accuracy of external investors in using the historical information to predict the future development of enterprises will be reduced,thus increasing the risk of information asymmetry.On the other hand,due to the loss of social resources,business uncertainty and other reasons to increase the risk of business.Both information risk and operational risk may increase the financing constraint of enterprises,which may increase the risk of stock price crash.Therefore,this paper will also study whether the strategic change in the inheritance of family business will affect the stock price crash risk through the path of financing constraint.This paper takes the listed family enterprises whose chairmen changed from 2007 to 2017 as the research samples and finds that: first,the strategic change in family business inheritance is significantly positively correlated with the risk of stock price crash.The greater the degree of strategic change in family business inheritance,the greater the risk of stock price crash.Secondly,in the inheritance of family business,political correlation will affect the positive correlation between strategic change and stock price crash risk.Thirdly,in the inheritance of family business,there is an intermediary effect between the strategic change and the risk of stock price crash caused by financing constraint.In other words,the greater the strategic change,the greater the financing constraint and the greater the risk of stock price crash.