The Impact Of Institutional Investors Field Research On Stock Price Crash Risk

In the past,China’s capital market was plagued by opaque information.To this end,the government and relevant departments have issued a number of policies to improve the information environment and the quality of information.The research system is an important part.In July 2012,the Shenzhen Stock Exchange issued the "Information Disclosuren Business Memorandum No.41—Investor Relations Management and Information Disclosure" requiring listed companies to strictly disclose information on investor relations activities starting in 2013.Since then,institutional research has been favored by investors and listed companies,becoming an important way for investors to obtain information.However,as the field research activities of institutional investors have become more and more popular in A-shares,they have failed to prevent the frequent "explosions" of listed companies in China’s capital market.We cannot help but think about whether field research has value? At present,scholars have examined the economic consequences of field investigations from multiple angles,but there is little literature focusing on the impact of institutional investors field investigations on the risk of stock price crashes.Institutional investors’ field research activities are a double-edged sword and may have a dual impact on the risk of stock price collapse.On the one hand,the original intention of the supervisory authorities to establish the research system is to encourage investors to further explore the private information of enterprises and promote fair information disclosure.Institutional investors may interact and communicate with enterprises through active field research activities to reduce the degree of information asymmetry of enterprises.Effectively supervise management’s behavior and curb the risk of stock price collapse;on the other hand,field research may be limited by factors such as the irrational behavior of investigators and management self-interest,which may trigger short-sighted trading behaviors of other investors and cause investor overheating.The external attention it brings may also intensify the pressure on the company and cause managers to further cover the bad news,thereby exacerbating the risk of stock price collapse.Therefore,this article attempts to analyze whether the on-site investigation of institutional investors inhibits or exacerbates the risk of stock price collapse? Does the above-mentioned mechanism of action exist? In addition,considering the types of field surveys,is there a difference in the impact of joint surveys and individual surveys on the risk of stock price collapse? Incorporating the enterprise’s information environment and institutional environment into the research framework separately,will the impact of institutional investors’ field research on the risk of stock price collapse change?This article uses a combination of literature research method,theoretical analysis method and empirical research method.First,collect,read,and sort out the relevant literature about the research on the economic consequences of on-site investigations by institutional investors and the influencing factors of stock price crash risk,explore the deficiencies in the existing literature,and clarify the basic research directions;then,explain the definition of institutional investor field investigation and stock price collapse risk,and analyze and derive research hypotheses based on the review of information asymmetry theory,mosaic theory,principal-agent theory,behavioral finance theory,and expectation violation theory.Taking the Shenzhen Stock Exchange A-share listed companies as a research sample from 2013 to 2019,based on theoretical analysis,the impact of on-site investigations by institutional investors on the risk of stock price crash is empirically tested,and use the intermediary effect model to test the mechanism of action,and further discuss the heterogeneous influence of the types of field surveys,the information environment and the institutional environment of enterprises.Finally,based on the research conclusions,suggestions are made on how to guide investor relations activities and improve the research system to reduce the risk of stock price collapse.The research results show that:(1)On-site research activities of institutional investors will aggravate the risk of stock price collapse,which is mainly achieved by amplifying investor sentiment and exerting media attention;(2)This positive impact is mainly caused by joint research.Independent research has no significant impact on the risk of stock price crash;(3)Further analysis,it is found that the on-site research has aggravated the risk of stock price crash only in an environment with opaque information and poor institutional environment.Based on the research conclusions,the following suggestions are made:(1)For investors.They should cherish the opportunities for on-site research,continuously improve professional capabilities,maintain a good attitude,and at the same time,they should not be partial to research information;(2)For enterprises.It is necessary to make good use of the information channel of on-site research.Investors who treat the research should be treated equally,standardize the information disclosure of on-site research,and enhance the company’s value level;(3)For the Regulatory authorities.It is necessary to guide and regulate the interaction between investors and enterprises,and improve the on-site research system.At the same time,it is necessary to further design resonable analyst evaluation system and continuously improve the information environment and institutional environment of enterprises.