Research On The Impact Of Financial Supervision On Stock Price Crash Risk

In recent years,under the background of the deepening trend of the real economy from real to virtual,the stock price collapse in China’s capital market has occurred frequently,which has led to the frustration of investors’ confidence and the sharp rise of financial risks,affecting the stability of the financial market.Therefore,it is an important task for financial supervision to prevent and resolve systemic financial risks and guide financial capital to serve the real economy.Although a large number of documents have discussed the impact of financial regulation on the macro economy,financial institutions,and the financing of entity enterprises from the theoretical level,as well as the impact of entity enterprises from real to virtual on the risk of stock price collapse,due to the lack of appropriate research scenarios of exogenous impact of financial regulation policies,few documents have mentioned the impact of financial regulation on the stability of the financial market.Based on this,this paper takes the new asset management regulations as a quasi-natural experiment,takes the quarterly data of non-financial listed companies in Shanghai and Shenzhen A-shares from 2016 to 2020 as the research sample,takes the micro-view of the risk of stock price collapse as the entry point,and empirically tests the impact of financial strong supervision policies on the stability of the financial market based on the generalized double difference method.First,the negative skewness coefficient and the fluctuation rate of earnings are used to measure the risk of stock price collapse,and the effect of strong financial supervision on the risk of stock price collapse is investigated based on generalized double difference model.Then,from the perspective of cash flow risk and investor sentiment,the mechanism of its impact effect is studied,and the heterogeneity of its impact effect is further investigated from the perspective of equity nature,information transparency,external audit quality,and debt level,as well as the moderating role of media reports,and the reasons for the impact of strong financial supervision on the risk of stock price collapse are further analyzed from the perspective of financial asset allocation structure.The study concludes that: first,strong financial supervision has led to the rise of the risk of stock price collapse of enterprises with higher levels of financial investment.However,after the implementation of the new asset management regulations for 5 quarters,this effect gradually disappeared;Second,strong financial supervision increases the risk of stock price collapse of enterprises with higher financial investment level by increasing the risk of cash flow and stimulating the rising investor sentiment;Third,the effect of strong financial supervision on increasing the risk of stock price collapse of enterprises with high level of financial investment is more significant in state-owned enterprises,low information transparency,weak external audit supervision and over-indebted enterprises;Fourth,media reports played a significant positive regulatory role in the process of intensifying the risk of stock price collapse of enterprises with higher levels of financial investment due to strong financial supervision,which was further decomposed into positive media reports and negative media reports.It was found that positive media reports did not play a negative regulatory role,while negative media reports played a significant positive regulatory role;Fifth,strong financial supervision has no significant impact on the risk of stock price collapse of enterprises holding short-term financial assets,but it has exacerbated the risk of stock price collapse of enterprises holding long-term financial assets.The research conclusions of this paper provide micro-experience evidence for the study of the economic consequences of strong financial supervision and the factors affecting the risk of stock price collapse,and also provide policy implications for the improvement of the financial supervision system and the realization of financial market stability.Finally,this paper puts forward policy recommendations from the perspective of listed companies,financial supervision and investors to prevent stock price collapse and maintain the stability of the capital market.