Research On The Impact Of Stock Price Crash Risk On Cash Holding Level

With the gradual transformation and improvement of China's capital market,enterprises are facing new challenges while facing huge development opportunities.As the abnormal phenomenon of the capital market,the stock price crash,no matter whether it is a mature market in Europe and America,or an emerging market in China,there have been many cases in recent years.Once a stock price crash occurs,it is often accompanied by a sudden and contagious situation.The stock price collapses in a short period of time,and even panic spreads.Corporate financing costs and agency costs rise sharply.Corporate financial risks face huge challenges.Therefore,maintaining a certain level of liquidity is essential for the survival and development of enterprises,and cash,as the most liquid asset,has increasingly attracted the attention of managers.Not only the internal governance factors but also the macroeconomic environment and other factors affect the level of cash holdings.The level of cash holding is not only related to the current business situation of the enterprise,but also to the future development of the enterprise,and is a very important financial decision for the enterprise.In the face of future uncertainty and rising financing costs,how to adjust corporate cash holdings has always been the focus of scholars.In recent years,the related discussion and research on stock price crash risk and cash holding level have gradually increased,but most of the existing research has focused on the inducing factors of stock price crash risk,the impact of stock price crash risk on corporate business strategies and the society Studies on economic consequences are relatively few.This article studies the impact of cash holdings on the level of cash holdings.This paper selects the data of non-financial listed companies with A shares in Shanghai and Shenzhen from 2007 to 2018.Based on agency cost theory,information asymmetry theory,and prioritized financing theory,this paper analyzes the inherent effect between stock price crash risk and cash holding Mechanism,and put forward hypotheses,using multiple regression and group regression empirical analysis toverify the hypothesis.The study found that(1)the risk of stock price collapse is positively correlated with the level of cash holdings,that is,the increased risk of stock price crashes increases the level of corporate cash holdings.(2)Divide enterprises into groups with higher information transparency and lower information transparency according to information transparency,and find that the positive correlation between stock price crash risk and cash holding level in the group with higher information transparency is significantly lower than that with lower information transparency.That is,increasing information transparency will suppress the positive correlation between stock price crash risk and cash holding level.(3)Compared with non-state-owned enterprises,the positive correlation between stock price collapse risk and cash holding level in state-owned enterprises has decreased significantly,indicating that non-state-owned enterprises are more likely to increase their cash holding level due to increased stock price collapse risk.There are five chapters in the main body of this article.The first chapter is an introduction.The problems of this paper are put forward in the context of China's capital market.The research results of domestic and foreign scholars on the risk of stock price crash and cash holdings are analyzed and analyzed.Ideas,methods,innovations and characteristics.The second chapter is related concepts and theoretical basis,defines the concepts of stock price crash risk and cash holding level,and expounds the theoretical basis such as trade-off theory,information asymmetry theory,agency cost theory and so on.The third chapter is theoretical analysis and assumptions.It describes the changes of China's stock market from 2007 to 2018 and the current status of cash holdings of China's A-share listed companies.It also analyzes the mechanism of stock price collapse risk and the level of cash holdings.The regulatory effects of the transparency of information and the nature of property rights are analyzed,and three research hypotheses in this paper are proposed in turn.Chapter 4 is an empirical test.By defining explanatory variables,explained variables,regulated variables and control variables,a regression model is established,the sample range and data source are determined,descriptive statistics,correlationanalysis and multiple regression analysis are performed to obtain regression results Finally,the robustness test is carried out by replacing the main variables.The fifth chapter is a summary chapter of the full text.It summarizes the full text,summarizes the research conclusions and makes suggestions,points out the shortcomings of the research in this article,and puts forward the future research prospects.