Risk Management Of Suppliers' Stock Price Crash Based On Customer's Trade Sanctions

As a developing country,the large-scale domestic listed companies in China will cause the risk of stock price crash due to information asymmetry and opacity.This will not only seriously damage the interests of investors,but also cause a mismatch of real economic resources.In addition,the sustainable supply chain has developed rapidly in recent years,which lead core and related companies to gain and lose together.In particular,as Chinese companies continue to deepen their global trading business and improve market voice,the economic problems have intertwined with national politics and technical security,which make them face the high possibility of trade sanctions.Therefore,this paper explores the impact of trade sanctions on upstream suppliers,provide new ideas for the risk management of supplier stock price crash caused by trade sanctions from the perspective of supply chain.This paper takes the US trade sanctions against Huawei as an example,and selects the relevant data of Huawei's Chinese core listed suppliers from 2013 to 2018 as the experimental group.Meanwhile,we uses the PSM method to select the control group of companies and then uses the DID model to explore the impact of trade sanctions on Huawei to the risk of supplier stock price crash.The study finds that Huawei's trade sanctions have a positive effect to the risk of the stock prices crash of Chinese suppliers.And the results of group research between the mainland market and others show that Huawei's trade sanctions have no significant effect to the risk of stock prices crash of Hong Kong and Taiwan suppliers.In addition,according to the grouping study depending on suppliers' industries,we found that the sanction has a more significant impact to the risk of stock price crashes of suppliers in electronics manufacturing industry.The research results in this paper lay the theoretical basis for the impact of customer trade sanctions on the supplier's stock price crash,and provide specific suggestions for related companies to better manage their own stock market crash risks.Meanwhile,it also helps investors better control their own asset allocation and investment strategies,provides reference for the formulation of relevant institutional policies and the solution of large fluctuations in stock market capital prices.