Research On The Impact Of Banking Competition On The Risk Of Stock Price Collapse

To achieve high-quality economic development,it is essential to continue to deepen reform of the financial system.At the end of the 20 th century,our country made it clear to further promote the marketoriented reform of the banking system.Then the government continued to introduce a series of policy about banking reform,loosening the banking market access rules,promote the development of small and mediumsized Banks,at the same time,continuously strengthen the financial opening,lead the foreign Banks into China,Gradually formed a diversified banking system,the banking industry competition is more and more fierce.It not only optimize the financing environment of real enterprises,but also promote the banks to better play the governance role of creditors.At present,relevant scholars have studied the impact of banking competition on corporate financing constraints,corporate innovation and corporate earnings management,but few scholars have further studied its impact on the risk of stock price collapse.Due to the risk of individual stocks share price collapse easily cause systemic financial risk,so according to the management problem of enterprise stock price crash risk is especially important.Relevant literature has discussed the management function of external macro policies,such as interest rate marketization,but few scholars consider banking marketization reform of the external environment.Therefore,in combination with the creditor’s rights governance mechanism of banks,this paper studies the relationship between banking competition and the risk of stock price collapse of enterprises,which not only broadens the research scope of relevant literature,but also provides a certain reference basis for China to build a modern financial system and prevent and resolve systemic financial risks.In terms of theoretical analysis,this article is based on relevance theories,makes a theoretical analysis on the relationship between banking competition and the risk of stock price collapse.Then discusses the nature of enterprise scale,the degree of competition in the market,property right and agency costs affect how banking competition on the governance effect of stock price crash risk.In terms of empirical analysis,this article is based on the 2011-2019 China’s Shanghai and Shenzhen a-share listed company data as the research object,builds the bidirectional fixed effects model,baseline regression analysis was performed,then conducted a series of heterogeneity analysis,to verify the hypothesis of this article.Secondly,this article implemented endogenic treatment by the instrumental variable method and natural experiment method to alleviate the possible endogenic problems.Then,this article implemented the robustness test by replacing the banking competition index and removing specific samples,which further confirms the research conclusions of this paper.Finally,based on the selection of appropriate mediating variables and the construction of the mediating effect model,the paper tests whether banking competition can restrain the risk of stock price collapse by affecting financing constraints and earnings management.The conclusions of this paper are as follows:First,after controlling other factors,the banking competition has significant inhibitory effect on the risk of stock price collapse of enterprises.It reflects the banking competition strengthen the supervision of the banks to the enterprise,alleviate the enterprise financing constraints,and give full play to the governance function of bank creditors,reduced the enterprise earnings management behavior,It improves the stock price crash risk of listed companies.Second,compared with state-owned enterprises,large enterprises,enterprises with low competition degree in the industry and enterprises with low agency cost,the creditor’s rights governance effect of banking competition is more significant in private enterprises,small and medium-sized enterprises,enterprises with intensified competition in the industry and enterprises with high agency cost.Thirdly,the results of the mechanism test show that banking competition reduces the risk of stock price collapse by alleviating the financing constraints and inhibiting earnings management of enterprises respectively,that is,financing constraints and earnings management are part of the intermediary factors between banking competition and the risk of stock price collapse of enterprises.This paper puts forward the corresponding policy recommendations:first,to further relax the barriers to entry of small and medium-sized Banks,relax restriction on foreign Banks regulation and barriers to industry,for the joint-stock commercial Banks,city commercial Banks and foreign Banks to provide a better policy environment,thus improve the ability and level of all kinds of bank service the real economy.Second,establish and improve the high quality accounting information system,form the standard unified enterprise accounting system.At the same time,banks and other financial institutions need improve information recognition system and related system,the enterprise itself also to standardize their own financial and accounting system,which promotes to form a good information environment.