Research On The Influence Of State-Controlled Listed Companies Executives Political Promotion Incentive On Stock Price Crash Risk

Stock price crash is a financial anomaly that cannot be reasonably explained from traditional efficient market theory.Stock price crash not only seriously undermines the confidence of investors,but also hinders the normal financing activities of enterprises and the healthy development of the real economy,and even affects the internationalization of China ’s capital market.Managers are an important factor affecting stock price crash risk.Considering that executives of state-owned listed companies in China have the characteristics of “ economic man ” and “ political man ” at the same time,their political promotion incentives may have a great impact on the risk of stock price crash.Therefore,the research on this has important theoretical and practical significance.Based on the sample data of 460 state-controlled listed companies in Shanghai and Shenzhen A shares from 2008 to 2019,combined with the practice of state-controlled companies governance,this paper measures the political promotion incentive faced by state-controlled listed companies executives from four aspects: enterprise performance,executive education level,executive age and previous executive direction.On this basis,the use of normative research methods,empirical analysis and models such as mediating effect,to explore the following issues: Will the political promotion incentives of executives of state-controlled listed companies affect stock price crash risk ? Does the internal control quality of enterprises play a mediating role in it ? How does media focus on regulating the impact of executive political promotion incentives on internal control ?This paper found that:(1)The political promotion incentive of executives of state-controlled listed companies and stock price crash risk show a negative relationship at the statistical level of 5 %.After a series of robustness tests and considering endogenous problems,the negative relationship between the two is still obvious.(2)After the subdivision of the political connections among the controllers of state-controlled listed companies,the regions where the state-controlled listed companies are located and the executives of state-controlled listed companies,it is found that the negative relationship between the political promotion incentive and stock price crash risk is more obvious at the statistical level of 5%,5%,10% and 1% for the executives of central companies,state-controlled listed companies in the eastern region,and government work experience and executives with political identity.(3)The results of mediating effect test show that the political promotion incentive of executives in state-controlled listed companies reduces stock price crash risk by improving the quality of internal control.(4)The results of moderated mediation effect test show that media attention reduces stock price crash risk of state-controlled listed companies by positively moderating the relationship between political promotion incentives of state-controlled listed companies executives and the quality of internal controls.The research in this paper not only provides a new perspective on the influencing factors of corporate stock price crash risk,but also provides empirical evidence for the reform of the promotion mechanism of state-controlled listed companies.