Institutional Ownership,Security Analyst Following And Crash Risk

Compared with Western countries, the capital market in China started later. under the support of government policy, the capital market developed fast and made great contributions to our national economy. With the increasing number of listed companies in China and the continuous development of the securities market, to stabilize the stock market is very important. However, the most prominent issue of the securities market is speculative, stock prices plummeted, the stock market instability. Particularly from the slump triggered by the collapse of the share price is more dangerous, just like the stock market crash of 2007 and 2015.These issues bring huge losses to investors and also make the regulators face more severe challenges. All these caused the investors, regulators, management and academic attention. At present, the research literature on stock price crash risk is little, the research field is narrow, especially the study of China's securities market is more scarce. This paper begins with the research focus, we discuss institutional investors and securities analysts in the stock price collapse in the role. Then from this perspective, this article is to discuss how institutional investors and securities analysts affect stock price crash risk.In recent years, under the support of government policy, China's institutional investors developed fast. And gradually formed mainly on securities investment funds, pension funds, securities companies, trust companies, qualified foreign institutional investors, insurance companies, and other auxiliary diversified development pattern. Institutional investors as the main investment of our country securities market power, their behavior can have a significant impact on the listed company's share price. First of all, As professional investors, institutional investors have more money, their investment should be more rational. Secondly, institutional investors hold the shares of listed companies. As shareholders of listed companies, institutional investors have the function to manage the listed companies. However, in our country, institutional investors can stick to value investment rather than short-term speculation? Institutional investors can truly be formed to supervise the management of listed companies rather than collusion with management? As an investor, will be in pursuit of profit, institutional investors are no exception. Institutional investors will use their own resources, information superiority and market influence to manipulate the shares of listed companies in order to gain excess returns. And in our country, laws and regulations are not perfect. Institutional investors and company management will conspire insider trading in order to obtain excess returns. Therefore, institutional investors will be important factors to consider in the stock price crash risk.Securities analysts as China's securities market information agency, closely linked with listed companies and investors in the securities market. Securities analyst provide many information about listed companies for investors and reduce the asymmetry of information between investors and listed companies. However, securities analysts will also pursue their own interests. In order to obtain substantial commission income, securities analysts will be preferred to share valuable information to the customers with good quality. In addition, securities analysts tend to push bullish research report, because typically bullish research report stimulated the transaction, resulting in higher commission income. In order to push a bullish report, securities analysts are more reluctant to disclose negative news related to listed companies. The accumulation of negative news will be accumulated to a certain extent and then flood the market, causing stock price declines, which may lead to stock price crash risk. Therefore, securities analysts are also be an important factor in stock price crash risk.In addition, the commission income of securities analyst and career advancement are connected with institutional investors. Institutional investors is an important service object of securities analyst and commission income of securities analyst originate from institutional investors. Securities analyst's professional goal is to board the "new wealth" best analysts' list, while voting power in the hands of institutional investors.Therefore, this article from the perspective of institutional investors and securities analysts to study the relationship between stock price crash risk. Based on the 2006-2015 a-share listed companies in our country as the initial samples. After eliminating related samples, finally got a total of 15,131 study sample. On the basis of summarizing the domestic and foreign research literature, using empirical research methods of descriptive statistics, regression analysis and other empirical research methods, examines the institutional investors holding and the number of securities analyst following and the relationship between the stock price crash risk. Further examines the institutional investors holding, securities analysts follow both interaction and the relationship between the stock price crash risk. The main contents of this paper are as follows:The full text is divided into seven chapters. The first chapter is the introduction, mainly introduces the research background, significance, main contents, thesis framework and innovation of this paper. First, giving a brief description about institutional investors, securities analysts and the stock crash risk. Then from the perspective of institutional investors and securities analysts, analyzing the relationship between institutional investors, securities analyst and the stock price crash risk. Then introduce the main content and innovation of this study. The second chapter is a review of the literature. Firstly, introduced the research literature related to institutional investors, mainly on corporate governance, pricing efficiency and stock volatility. Secondly, introduces research literature related to securities analysts, mainly on corporate governance and pricing efficiency. And then sort out the researches of the relationship between institutional investors and securities analyst. Finally, introduced the research literature related to stock price crash risk. The third chapter is the theoretical background and analysis system of this article. Mainly introduces the background of institutional investors and securities analysts' status and role. The theoretical analysis is to introduce institutional investors and stock price crash risk, securities analyst and stock price crash risk, and as well as the two interaction and the relationship between the stock price crash risk. Then according to the theoretical analysis propose the research hypothesis. The fourth chapter is the research design, including sample selection and data sources, model design and variable definition. The fifth chapter is the empirical research part of this paper, mainly including descriptive statistical analysis, correlation test, multicollinearity test. Institutional investors holding empirical study of the impact of stock price crash risk. Securities analyst empirical study of the impact of stock price crash risk. Finally the empirical analysis of the two interaction and the relationship between the stock price crash risk. And then analyze the results. The sixth chapter is the robustness. In order to verify the accuracy of the conclusions of this study. The seventh chapter is the conclusion of this paper. Mainly introduced the conclusions and the enlightenment. Conclusion mainly summarizes the relationship between institutional investors holding, securities analyst following and the stock price crash risk.The main conclusions of this paper:(1) The institutional investors and stock price crash risk has significantly positive correlation; (2) The securities analyst and stock price crash risk shows significant positive correlation;(3) The interaction of the institutional investors and securities analysts exacerbated the stock price crash risk. Research of this paper combines institutional investors and securities analysts, broadened the research literature in this field. The results of the study provides empirical evidence to regulate the behavior of institutional investors and securities analysts. And maintain financial market stability, strengthen the protection of investors' interests.The main innovation of this paper:(1) The innovation of research Angle. About the document of stock price crash risk research, mostly from the internal characteristics of listed companies to carry out analysis and study. There are empirical studies from the viewpoint of institutional investors, securities analysts, but generally from the herd behavior of institutional investors, the securities analyst earnings forecast accuracy. So far, there is no literature to analyze the relationship between institutional investors and stock price crash risk or the relationship between securities analysts and stock price crash risk. Then this article from a new Angle to study the effect of the stock price crash risk factors, and finding out the relationship between institutional investors, securities analysts and stock price crash risk. Expanding the stock price crash risk research literature, the research Angle is novelty and innovation. (2) The innovation of content. This paper is different from the previous literature. This paper not only studies the institutional investors and stock price crash risk, securities analysts and stock price crash risk, but also studied the institutional investors, securities analysts and the stock price crash risk, the interaction mechanism of institutional investors and securities analysts are taken into account. Institutional investors affect the securities analysts'career and commission income, securities analysts study influence the holding of institutional investors. The combination of this two factors is an innovation. (3) The innovation of research method. The empirical research methods come from previous papers. The methods are not only science, but also the specification.The defects of this study:(1) in this paper, the institutional investors including securities investment funds, insurance companies, securities companies, pension funds, qualified foreign institutional investors, banks, finance companies, trust and non-financial listed companies. But they are not classified. (2) There are many factors affect stock price crash risk, I only consider the two factors:investors and securities analysts. There may be omitted variables.