IPO Over-financing、Management Power And Stock Price Crash Risk

In today’s world,the economic environment is unpredictable.In production and operation,enterprises must not only face various changes caused by macro reasons,but also constantly pay attention to internal corporate governance issues.If they do not actively and effectively identify and resolve major risks,they are likely to face the risk of share price collapse,which in serious cases may lead to the possibility of corporate bankruptcy.However,if an enterprise over-finances,especially when the number of debt financing is high,not only will it make the enterprise deviate from the optimal capital structure,the operating cost of the enterprise and the operating risk it faces will also increase,leading to a reduction in the efficiency of the cash flow turnover of the enterprise’s capital,resulting in a waste of capital and resources,and at the same time,it will also cause the risk of the collapse of the enterprise’s share price,which will have a negative impact on the operation of listed companies and market investors.Due to the importance and complexity of the financing issue,the problem of excessive financing has been a research concern for scholars.It is crucial for China,which is undergoing economic transformation and upgrading,to find ways to induce companies to use the raised capital wisely,avoid the capital being idle,and effectively curb the over-financing behavior of Chinese listed companies,so as to ensure corporate safety and reduce the risk of corporate share price collapse.Managers of Chinese non-state-owned listed companies are usually based on maximizing their own interests,and the power of corporate managers usually interferes with the financial reports and the efficiency of the use of funds by supervising and controlling the internal control of the companies through holding,restraining and supervising,which can easily lead to over-investment of the raised funds and misuse of funds.The continuous improvement of the internal control system can improve the corporate framework and governance model and produce positive governance effects.It is of great importance to study the moderating effect of management rights on the risk of over-financing and share price declines in listed companies.This paper focuses on the effect of excessive financing on share price crash risk of listed companies in China and whether managerial power has a moderating effect on the impact of excessive financing and share price crash risk of listed companies.This paper takes A-share companies from 2016 to 2021 as a sample.and through regression analysis of the fixed-effects model,the results show that(1)excessive financing of IPO companies is significantly and positively related to share price crash risk indicators,i.e.the higher the degree of over-financing of listed companies,the higher the risk of corporate share price collapse,and the greater the effect of the degree of over-financing of non-state enterprises on the risk of share price collapse;(2)management power can positively influence the effect of excessive financing of listed companies on share price crash risk.This paper provides new ideas and directions for the integrated internal governance of listed companies and the prevention and control of corporate share price collapse risks in the context of economic upgrading and transformation.The innovation from this paper lies in:(1)Introducing the over-financing variable;(2)The introduction of the regulatory variable of management power provides a method and idea for further study of this issue.