Internet Social Media And Stock Price Crash Risk

In recent years,the spread of information is undergoing great changes in terms of content,form,speed and width,all kinds of investors are more inclined to use the Internet to know information of capital market.Meanwhile,many listed companies have registered their own Weibo official account,Wechat official accounts,and other interactive social network.All these have made the social media as a important information hub in this Internet era.Among these social media platforms,Guba forum of East Money began its operations since 2006.As a community form among the Internet media,it has made many small and medium investors have a sense of belonging and the possibility of rapid access to information.Investors can discuss with each other on all kinds of stock market issues.On the other hand,the collapse of stocks is fierce in the secondary capital market: In 2018 alone,300266 consecutively reaches down limit for 8 times,300090 consecutively reaches down limit for 9 times,600439 consecutively reaches down limit for 4 times,002508 consecutively reaches down limit for 2 times,002252 consecutively reaches down limit for 6 times.The plunge in the market without warning not only bring the evaporation of wealth,but also shows the asymmetry of capital market information and the lack of communication efficiency.In this context,Internet social media as an information hub has an impact on the stock price crash.Whether this stock price crash can be suppressed by speeding up information disclosure,has a very practical meaning to be discussed.This paper uses the sample data of Shanghai-Shenzhen A-share listed companies from 2008 to 2017,as well as East Money Guba forum data from Chinese Research Data Services Platform(CNRDS)to study the relationship between the social media and related stock price crash.Study shows that(1)the more information posted for the listed company,the more the stock price crash risk can be reduced(2)in the samples of enterprises types and location differences,this negative influence still exists separately,and there is no significant difference between these two categories of enterprises;(3)The increase in the shareholding of institutional investors can promote the suppression of stock price collapse.(4)Further study of Internet social media by examining the original sample again in terms of pageviews shows that: the more the company's posts are read,the lower the risk of its stock price crash in the future is,which confirms that the amount of information received by investors on the Internet social media is also positive for the stock price crash risk.For mechanism test,this paper analyzes from the perspectives of information transparency and agency cost.The research results show that the more posts published in Guba,the higher transparency of company information;And posting counts also has a suppression effect on agency cost.This result shows that the forum posts of stocks will make the company's information to be more transparent,and at the same time it will generate some external supervision of the company,thus reducing the stock price crash risk.In the robustness test,the main empirical part of the explanatory variables in this paper chooses the lag phase value,thus avoiding the endogeneity problem of time.In particular,in the robustness test section,the industry average is selected for the instrumental variable,the regression model selection,and the abnormal year event to analyze the empirical results,and the research conclusion is still valid.Finally,this paper proposes relevant suggestions from three different perspectives: government regulation,listed companies and secondary market investors.This paper enriches the research on the impact of social media on the stock price crash by studying the factors of different ownership,different listing locations,different shareholding ratios of institutional investors,information reading intensity,information transparency and agency cost.Moreover,given the lack of research on reading statistics of Internet social media,this paper enriches and supplements the studies of the relationship between Internet social media and stock price crashes,through further study of the pageview counts and stock price crash indicators.