Study On The Impact Of Minority Shareholders’ Activism On The Stock Price Crash Risk

Minority investors are the main body of A-share capital market.How to protect the legitimate rights and interests of minority investors and how to reasonably exercise their rights have been the focus of long-term attention from all walks of life in recent years.With the development of the Internet,participation in corporate governance through social media has become a new way for minority shareholders to exercise their activism.In recent years,minority shareholders have gradually changed from the negative way of "voting with their feet" to the active way of "voting with their hands" and "voting with their mouth" in the process of corporate governance.Stock price crash risk is also a hot topic that many scholars and regulatory authorities pay close attention to.On the macro level,stock price crash risk will affect the financing and resource allocation functions of the capital market,which is closely related to the smooth development of the economy.On the micro level,stock price crash risk will also lead to huge losses for investors in the capital market.Therefore,stock price crash risk is closely related to the interests of minority shareholders,but there are still relatively few studies on the relationship between the two.By reviewing the literature on the motivation,exercise path and governance effect of minority shareholders’ activism,the formation mechanism and influencing factors of the stock price crash risk,and the relationship between minority shareholders’ activism and the stock price crash risk,this paper finds that minority shareholders’ activism can inhibit the stock price crash risk.Moreover,the inhibitory effect is different under different ownership,institutional environment and ownership concentration.This paper further uses the data of China’s A-share listed companies from 2011 t0 2021 to empirically analyze the relationship between the activism behavior of minority shareholders through social media and the stock price crash risk.Through theoretical and empirical analysis,this paper discovers that minority shareholders’ activism can inhibit the stock price crash risk.Moreover,in the non-state-owned listed companies,the worse the institutional environment is and the lower the ownership concentration is,the inhibitory effect of minority shareholders’ activism on the stock price crash risk is more obvious.In further research,this paper analyzes the path of minority shareholders’ activism affecting the stock price crash risk from two perspectives: management’s opportunistic selling behavior and traditional media coverage.Through the empirical analysis of the above two influence paths,we find that minority shareholders’ activism can inhibit the opportunistic selling behavior of the management,thus inhibiting the management’s behavior of hiding negative news in order to raise the stock price,and thus inhibiting the company’s stock price crash risk.In addition,the activism of minority shareholders through social media can also attract the coverage of traditional media,increase the supervision of the company,and compress the space for hiding negative information within the company,thus reducing company’s stock price crash risk.On the basis of the above research conclusions,this paper provides corresponding countermeasures and suggestions from the perspectives of regulators,enterprises and minority shareholders,in order to ensure that minority shareholders can participate in corporate governance more effectively,reduce the company’s stock price crash risk and make some contributions to stable economic development.