The Relationship Among Operating Cash Flow Inform Ativeness，the Institutional Ownership Of The Equity And Stock Price Crash

Listed company’s stock price "spike" is a global financial phenomenon,compared with developed capital markets abroad,China’s stock market plunged morefrequent phenomenon,and only11years in1997to in2008,China’s stock market has experienced four major slump phenomenon occurred plummeting average time of22.5months,the average decrease of51.65%,the most violent decrease of80.3%stocks plunge phenomenon is the commonplace (Tengtai et al.,2008)."Slump" phenomenon cause stock price risk which has brought a great dealof impact and destruction to the healthy development of the capital market andthe investor’s personal wealth, and thus the regulators,investors and academiawidespread concer the subject.In recent years,with the outbreak of the financialcrisis, stock price risk is a hot issue of macroeconomic and microeconomic Finance. Especially in the background of China’s rapid economic growth and thegradual accumulation of financial risks and vulnerabilities, the research of issue has important theoretical and practical significance to circumvent financial risk of China’s capital market and promote stable development of China’s stockmarket.The paper selectes2003-2011Shanghai and Shenzhen A-share listed companies related data for the study sample.Firstly，the paper tests the relationship between stock price crash risk and operating cash flow informativeness, using two measures of operating cash flow informativeness investigate the role of operating cash flow in predicting crash risk，We find that as operating cash flow informativeness increases, stock price crash risk generally decreases. Secondly，we investigate whether the institutional ownership of the equity can influence therelationship between stock price crash risk and operating cash flow informativeness，we find the institutional ownership of the equity can increase this negative correlation.