Research On The Influence Of Annual Report Disclosure Timing On Stock Price Crash Risk And Its Mechanism

China’s capital market has developed rapidly since its birth in 1990,but the stock price slump happens from time to time,which is like an untimely bomb for investors,capital market and the real economy.Therefore,more and more scholars focus on the study of this phenomenon.Most scholars believe that the risk of stock price collapse is caused by the management’s hiding of bad news.Due to principalagent and information asymmetry,managers are often motivated and conditional to selectively disclose corporate information to the outside.Annual reports of listed companies is the main channel of investors to obtain financial information of listed companies,according to our country the listed company information disclosure management method "regulation,in Chinese listed companies reward at the end of each accounting year 4 months as of the date of finish compiling and disclosure,and in order to balance the annual report disclosure time,improve the timeliness of annual report disclosure,Since 2002,China has implemented the annual report disclosure system by appointment.Despite this,China’s listed companies still disclose the annual report in April.So what is the information behind listed company managers choosing to disclose in April? Is it related to the risk of stock price collapse?In order to explore this problem,this paper selects all a-share listed companies from 2007 to 2019 as samples,and explores the relationship between managers’ behavior during annual report disclosure and future stock price crash risk based on information asymmetry theory,bad news hiding theory and investors’ limited attention theory.Furthermore,this paper further explores the effects of the motivation of hiding bad news(accounting information quality,financing constraints)and the restraint degree of managers hiding bad news(institutional investors’ shareholding,analysts’ attention and media’s attention)on the relationship between annual report disclosure timing and stock price crash risk.The empirical results show that:(1)When the company chooses to disclose the annual report in the period of high attention(January-March)in the previous year and in the period of low attention(April)in the current year,the risk of stock price crash will increase significantly.Companies with bad news tend to report in April,while companies with good news tend to report january-March.Since April is the period of annual report disclosure,investors’ attention is limited and they are slow to respond to the information of annual report disclosed by managers.Bad news cannot be reflected in stock prices in a timely and sufficient manner.Managers’ disclosure of annual report at this time can achieve the purpose of hiding bad news,thus exacerbating the risk of stock price collapse.(2)Companies with greater motivation to hide bad news,such as poor accounting information quality and greater financing constraints,will effectively enhance the positive impact of annual report disclosure timing on stock price crash risk.Companies with poor accounting information quality have lower information transparency,which is more conducive to the management to hide bad news.Investors’ insufficient attention will amplify the consequences of such behavior,and the timing of annual report disclosure will significantly increase the impact on the risk of stock price crash in the future.Larger companies financing constraints in order to get more external finance,more incentives to statements whitewash,drop the truth disclosure of annual report information,combined with investor response to the news,aggravate the bad news can’t even fully reflected in the share price,so as to enhance the annual report disclosure timing was influenced by stock price crash risk for the future.(3)Managers are constrained to hide bad news.For example,analysts and media pay more attention to the timing of annual report disclosure,the positive impact of timing of annual report disclosure on stock price crash risk will be effectively weakened,while institutional investors holding shares will effectively enhance the positive impact of timing of annual report disclosure on stock price crash risk.Institutional investors are not friends but enemies of individual investors,and they are the "conspirators" of managers.Analysts and media are important information miners and disseminators in the market,which can restrain managers’ behavior of hiding bad news to a certain extent and alleviate the problem of investors’ limited attention and low efficiency in information processing,so as to effectively reduce the impact of annual report disclosure timing on stock price crash risk.In addition,the media has a stronger restraining effect than analysts on the behavior of managers to hide bad news.The contributions of this paper are as follows: First,from the perspective of investors’ limited attention,this paper explores the relationship between annual report timing disclosure and the risk of stock price crash.The research results of this paper can expand the research on the economic consequences of annual report timing disclosure and the influencing factors of stock price crash.Second,from the perspective of managers’ motivation to hide bad news and the degree of constraint to hide bad news,this paper explores the mechanism of annual report disclosure timing on stock price crash risk,providing a new idea for the research in this field.Thirdly,the research results of this paper can provide individual investors with an easy to capture and identify the early warning signal of stock price collapse,protect the interests of individual investors,and contribute to the long-term stable development of the capital market.