Stock Price Crash Risk、Institutional Investors Heterogeneity And Debt Financing

Since the 1990s,China’s stock market has experienced violate fluctuations.Stock price crash leads to the loss of wealth of investors and it is not conductive to the development of the capital market as well.In recent years,stock price crash risk,as one of the external risks,has been widely concerned by scholars at home and abroad.Most of the studies focus on the influencing factors of stock price crash risk and they conclude that accounting information disclosure quality,corporate governance,information intermediary,management characteristics and institutional environment are factors that have a certain impact on stock price crash risk.However,hardly have studies focus on the economic consequences of stock price crash risk.It is far from sufficient to understand the causes of stock price crash risk.In order to better respond in related areas and mitigate the negative impact of stock price crash risk,we need to fully study the economic consequences of stock price crash risk.It is of theoretical and practical significance to study the economic consequences of the risk of stock price crash.Debt financing is an important financing method for listed companies in China.During debt financing,creditors are likely to collect information of stock price crash as the basis for decision-making.They will make up for the credit risk they assume by controlling the number of loans,the duration of lending and raising the cost of lending,which bring listed companies financing constraints.Meanwhile,with the development of economy,institutional investors actively participate in the capital market;however,they have different influences on corporate governance activities such as corporate debt financing due to different shareholding purposes.Therefore,out of the realistic problem of the frequent stock price crash and debt financing constrains in China,the thesis studies the economic consequences of stock price crash risk in terms of debt financing constraints of the listed companies.The thesis also makes a further research with institutional investors’ heterogeneity as the starting point.This paper makes an empirical study on the A-share listed companies listed on Shanghai and Shenzhen stock exchanges in 2008-2017.After drawing conclusions,the paper puts forward corresponding policy suggestions.The thesis can be divided into six parts:The first part is introduction.It gives an introduction of the research background and the significance of the article.It also introduces research contents and methods,and describes the possible innovation points.The second part is literature review.With the application of literature analysis method,the thesis firstly reviews related literature of stock price crash risk.Then,the thesis summarizes existing literature of stock price crash risk and debt financing constraint of the listed companies.The analysis of the related literature research provides a literature support for this article.The third part is theoretical analysis and research hypothesis.This part defines concepts and relevant theories.It also put forward the research hypothesis after analyzing with relevant theories.The fourth part is research design.This section will introduce the procedure of sample selection,data sources,variable definitions and model building.It makes preparation for empirical analysis.The fifth part is empirical analysis.This section shows the results of descriptive statistics,correlation analysis and regression analysis.And it draws empirical research conclusions after carrying out robustness tests.The sixth part is the research conclusion and policy suggestion.This section will draw a conclusion of the study and make policy recommendations based on the findings.Finally,the contribution and limitation of the research are summarized,and the further research direction is put forward.The research shows that there is a correlation between stock price crash risk and debt financing constraints of the listed companies.What is more,with the greater risk of stock price crash,the listed companies will suffer more serious debt financing constraints.The constrains are less debt financing,shorter term financing and higher cost of debt financing.Moreover,stable institutional investors exacerbate the negative effect of stock price crash risk on debt financing constraints.In order to alleviate debt financing constraints of the listed companies,we should firstly promote steady and healthy development for China’s capital market.Then,we ought to prevent and reduce stock price crashes.Last but not the least,we have to make use of stable institutional investors in improving the level of corporate governance and information disclosure,and alleviate the degree of information asymmetry between enterprises and creditors.The innovation points of this paper are mainly embodied in three aspects.First of all,scholars at home and abroad have made extensive research on the influencing factors of stock price crash risk;however,the study on the economic consequences of stock price crash risk is rare.From the view of debt financing constraints,the thesis studies the economic consequences of the risk of stock price crash,which enriches the literature on the economic consequences stock price crash risk.Secondly,from the perspective of institutional investor’s heterogeneity and property rights,this paper makes a deeper analysis of the relationship between stock price crash risk and debt financing,which enriches the existing research.Finally,the conclusion of this paper has certain practical significance,which provides reference for listed companies and government regulators to alleviate the degree of debt financing constraints by stabilizing stock prices and improving the quality of information disclosure.