Agency Costs And Risk Of Stock Price Crash

Stock price collapse not only damages the interests of investors seriously,but also greatly disrupts the normal operation of the stock market.Exploring the influence factors of the risk of stock price crash has become a hot topic in academia.This paper exammines the relationship between cost of agency and risk of stock price collapse by using data from 2010 to 2015 A-share listed companies.The study found that:(1)Companies which have CEO duality perform a higher probability of stock collapse;(2)The greater ownership concentration the company is,the easier stock price collapses;(3)Companies with high ratio of administration expense to total sales have the greater likelihood to meet share price crash;(4)The higher the total asset turnover rate of the company the less the possibility of stock price crash.After several steps of robustness test,conclusions above are true.Further research found that:(a)Relative to the state-owned enterprises,the stock price of non-state-owned enterprises which have CEO duality phenomenon are more likely to crash;(b)The impact of the "trench effect" on the risk of stock price crash has been validated.When equity concentration is low,relation between equity concentration and stock crash riskiness is positive.But when concentrat-ion is high,these two have a negative relationship.This paper not only provides a new perspective for the study of stock price crash risk,but also provides important theoretical support for improving the quality of corporate governance and reducing the risk of stock market crash.