Corporate Transparency,Media Concern And Stock Price Crash Risk

In October 2022,the Report to the 20th National Congress of the Communist Party of China clearly pointed out that high-quality development is the primary task of building a modern socialist country in all respects,so that we should focus on promoting high-quality development.As an important channel for enterprises to raise funds and the center for optimizing the allocation of resources in the modern economy,high-quality capital market plays an important role in promoting high-quality development of China’s economy.However,the development of China’s capital market is relatively backward,and various rules and regulations are still imperfect.At the same time,the current global economic environment is becoming increasingly complex.Moreover,the major risks,especially the risk of stock price crash,in the capital market usually have the characteristics of early concealment,structural complexity and uncertainty of the time point of outbreak^[1].The combination of multiple factors is likely to cause turbulence in China’s financial market,which will bring huge losses to investors,disrupt the market order,and even affect the high-quality development of China’s economy.Therefore,the Report to the 20th National Congress of the Communist Party of China pointed out that facing the fact that China’s development has entered a period of coexistence of strategic opportunities and risk challenges,in order to realize the mutual promotion and virtuous circle between the stable operation of the financial industry and high-quality development of China’s economies,it is necessary to strengthen risk awareness,improve the ability to early identify,early warn,early detect,and early dispose of risks,and actively explore and optimize disposal plans of major financial risk.So,it is particularly important to analyze the causes of the risk of stock price crash and explore its governance methods,which is of great significance to promote the steady growth of enterprises,orderly development of the industry and the smooth operation of the capital market.In order to decrease the risk of stock price crash,China’s government has formulated a series of laws and regulations such as the Company Law and the Securities Law to regulate the information disclosure behavior of listed companies,trying to alleviate information asymmetry by improving transparency,so as to achieve the governance effect of the risk of stock price crash.The existing research also confirmed that the improvement of accounting information transparency can indeed reduce the risk of stock price crash.With the development of China’s capital market,accounting firms and major securities companies are playing an increasingly prominent role,and the regulatory agencies are also constantly optimizing the institutional environment.In other words,these capital market participants all play an important role in improving transparency.Therefore,the concept of transparency should not be limited to the level of company’s information disclosure,but should be extended to the level of company’s overall information environment.So,some scholars further enriched the concept of transparency and defined corporate transparency as the extent to which external information users can effectively obtain specific information of a publicly traded listed company based on multiple perspectives^[2].Based on this background,this paper explores the relationship between corporate transparency and the risk of stock price crash.In addition,in recent years,the public’s dependence on and use of the media has increased year by year,and the media has become an important way for investors to know about the company’s information.In view of the information intermediary role and external supervision role of the media,on the one hand,media attention can alleviate the information asymmetry,and on the other hand,it can inhibit the management from making self-interest behaviors which are detrimental to the interests of the company.So,media attention may also have a certain impact on the risk of stock price crash,and it may have a similar mechanism with corporate transparency.Based on it,is media attention an alternative or complementary mechanism of corporate transparency to the impact of stock price crash risk?In view of the above analysis,this paper also examines the impact of media attention on the risk of stock price crash,and further examines the relationship between corporate transparency,media attention and the risk of stock price crash.It expands the breadth and depth of the research on the risk of stock price collapse.This paper puts forward three main hypotheses based on theoretical analysis,and takes the 2010-2021 a-share non-financial listed companies as a sample to empirically test the impact of corporate transparency and media attention on the risk of stock price crash,and their substitution effect in the process of influencing the risk of stock price crash.The mainly conclusions are as followed:（1）Corporate transparency can inhibit the future stock price crash risk;（2）Media attention can inhibit the future stock price crash risk;（3）Media attention and corporate transparency have an alternative effect in curbing the risk of stock price crash.（4）Compared with state-owned enterprises,non-state-owned enterprises have more obvious inhibitory effects on the risk of stock price crash by improving corporate transparency and media attention.The innovations of this paper are as followed:Firstly,this paper takes the multi-dimensional definition of corporate transparency as the analysis object,and studies its governance role on the risk of stock price crash,which makes incremental contributions to the existing research on the relationship between transparency and the risk of stock price crash.Secondly,this paper further studies the substitution effect of corporate transparency and media attention on the risk of stock price crash,which provides more ideas for the prevention and supervision of the risk of stock price crash.