Strategic Deviation,managerial Power And Stock Price Crash Risk

Since the last century,the phenomenon of stock price“spiking and crashing”in capital markets has been common.The stock price crash caused by the plummeting stock price not only severely reduced the efficiency of resource allocation in capital markets,hinder the pace of capital markets toward a long-term stable development,but also severely hit the vast majority of investments,small and medium-sized investors in some extreme situation,it may even cause social turmoil.Therefore,in recent years,the risk of stock price crash has become the focus of scholars at home and abroad.At the same time,in the past 30 years,innovation has become an indispensable motive force for the development of enterprises and countries.Enterprise innovation will inevitably break the industry's original "default" strategic model and form a differentiated strategy.But what effect will the differentiated strategy have on the capital market? The existing researches have rarely studied the impact of the stock price crash risk from the point of view of the strategic difference of enterprises,and the research on the Chinese market is scarce.Therefore,this article will take the risk of stock price collapse as the core to explore the impact of the difference of strategy in China on the stock price crash risk,and at the same time,bring the managerial power into the research system and explore its impact on the relationship between the two.The above problems have certain realistic and theoretical significance for stabilizing the turbulent capital market,protecting the interests of investors and perfecting the internal governance of enterprises.Based on the theoretical basis of information asymmetry theory,power approach and suppression theory and managerial power theory,the dissertation finds that: First,enterprises and management with large differences in corporate strategy are more likely to hide bad imformation due to their financing needs and their own interests,resulting in an increase in the risk of business collapses in the future.Second,the larger managerial power of enterprises,managers have greater say in corporate strategic decision-making,at this time the strategy adopted by enterprises is often more radical.Thirdly,there are motivations for the enterprises with large strategic differences to gloss over their statements.With the increase of managerial power,managers are more likely to seek the rent through the manipulation of information disclosure or earnings management,which aggravates the risk of stock price crash.Through the above analysis,this article put forward the corresponding assumptions,and select the 2007-2005 A-share listed companies on the data,excluding financial and insurance categories,ST and ST * enterprises,the annual rate of return less than 30 observations and the annual data of abnormal or missing data,were we finally obtained 11884 samples,and the data were regressed with 1% winsorize tailing.By analysing the results,the following conclusions can be drawed:(1)The corporate strategic difference is positively related to the stock price crash risk.Specifically,enterprises with large strategic differences are more motivated to hide information that is unfavorable to the enterprises and increase the possibility of concentrated release of bad news in the future,which eventually leads to an increase in the risk of a stock price crash.(2)There is a positive correlation between managerial power and corporate strategic difference.Specifically,if the managerial power is high,they will be more inclined to choose a radical corporate strategy of high risk and high return.(3)The expansion of managerial power will enhance the positive relationship between the strategic difference of enterprises and the risk of stock price collapse.Specifically,the greater the strategic differences in the business,managers are more motivated to hide the negative information for the enterprise,but management's behavior will still be subject to the existing checks and balances the power of supervision and control system.However,with the expansion of managerial power,the system of checks and balances with power will be weakened,which will help management to hide information that is unfavorable to the enterprises,thus further aggravating the risk of stock price crash.Based on the above conclusions,combined with China's current capital market environment,the following suggestions are made: First,to strengthen internal governance,check and balance managerial power,and balance the relationship betwwen the stateowned enterprises gradually decentralize the balance of power management and the check and balance of managerial power.Second,establish a reasonable mechanism of information disclosure to improve the transparency of listed companies.Third,regulate the capital market audit services and improve the overall quality of the audit industry.Fourth,to strengthen moral education and create a good atmosphere of integrity.