Study On The Inhibitory Effect Of Party Organization Participation In Corporate Governance On Stock Price Crash Risk

Up to now,Chinese capital market has been established for more than 30 years,the number of listed enterprises in our country has exceeded 5000,Chinese capital market helps promote economic development.With the increasing role of the capital market,its hidden risks can not be underestimated,among which the most concerned is stock price crash risk.Once the stock price plummets,it will damage the interests of all parties,affect the stability of our capital market,and is not conducive to the smooth operation of the economy.Therefore,it is of great significance to study stock price crash risk.However,current researches mainly focus on the features of management,board of directors,policy system and religious culture,etc.From the perspective of Party organization’s participation in corporate governance,there are relatively few literatures on its impact on stock price crash risk.As the characteristic way of governance,Party organization participation in corporate governance is important to promote the development of enterprises and capital market.Therefore,this paper explores the inhibiting effect of Party organization’s participation in corporate governance on stock price crash risk.This paper first clarifies the concept of the Party organization’s participation in corporate governance,stock price crash risk as well as relevant theories needed,and analyzes the participation of Party organizations in corporate governance can curb stock price crash risk.Then,The A-share listed company in Shanghai Stock Exchange and Shenzhen Stock Exchange from 2011 to 2020 are choiced as samples for processing and analysis,20,326 data were obtained,and the required model was constructed.On this basis,the data regression is carried out to verify the inhibiting action of the Party organization’s participation in corporate governance on stock price crash risk.Be sure to test the reliability of the results,this paper tested the results from the perspectives of propensity score matching,using one period lag data for explanatory variables,instrumental variable method,replacing explained variables,replacing explanatory variables,controlling missing variables,eliminating the influence of special years,etc.Finally,grouping regression is used and cross-fertilization is introduced to study whether inhibiting action of Party organization’s participation in corporate governance to stock price crash risk is affected by property rights,marketization level and audit quality differences.The results show that:(1)The participation of party organizations in corporate governance and stock price crash risk is significantly negatively correlation,that is,the participation of Party organizations in corporate governance can reduce stock price crash risk.(2)Property rights will affect the inhibitory action of Party organization’s participation in governance on stock price crash risk.In non-state-owned company,the inhibitory action of Party organization’s participation in corporate governance on stock price crash risk is more significant.(3)Audit quality will affect the inhibitory action of Party organization’s participation in corporate governance on stock price crash risk.In enterprises with low audit quality,the participation of Party organizations in corporate governance can significantly curb stock price crash risk.(4)The inhibitory action of Party organization’s participation in corporate governance on s stock price crash risk is different at different marketization levels.In enterprises with higher marketization level,the inhibitory action of Party organization’s participation in corporate governance on stock price crash risk is more significant.Finally,the paper gives interrelated policy suggestions because of conclusions:(1)Establish and improve the mechanism of Party organization participation in corporate governance.(2)In non-state-owned company to further strengthen the participation of the Party organization governance efforts.(3)Further strengthen the governance of Party organizations in company with relatively low audit quality.(4)Improving the market and other external governance environment.