Study On CEO's Financial Background And Stock Price Crash Risk

The orderly development of capital market depends on the stable operation of stock price.Stock price crash seriously damages the interests of shareholders and affects the normal operation of listed companies.What's more,it may cause drastic fluctuations of the entire stock market,bring serious adverse effects on the capital market,disrupt the market economic order and hinder the healthy development of the national economy.At present,the stock price crash has been widely concerned by managers,shareholders,securities regulators and scholars at home and abroad.It is of great significance to find out the cause of stock price crash and explore the factors influencing the risk of stock price crash to reduce the risk of stock price crash and effectively prevent the occurrence of stock price crash.There have been abundant research results,mainly focusing on internal and external factors at the company level,but few scholars study the risk of stock price crash from the perspective of the characteristics of company executives.As the core of senior management,the CEO plays a crucial role in the daily operation,external information disclosure and communication of the company.Therefore,this paper intends to study the relationship between the CEO's financial background and the stock price crash risk of China's listed companies from the perspective of the personal characteristics of executives.Based on a large number of previous studies and supported by principal-agent theory,information asymmetry theory and high-level echelon theory,using literature review and empirical analysis method,this paper mainly studies the relationship between CEO's financial background and stock price crash risk by using the data of China's A-share listed companies from 2009 to 2016,and further studies the influence of CEO power and market environment on the relationship between them.This paper firstly reviews and summarizes the existing relevant literatures,then makes theoretical analysis in combination with relevant theories,and proposes the research hypothesis of this paper.Then,it defines variables,designs empirical models and conducts empirical tests on the hypotheses by using relevant data.The content of empirical test is mainly descriptive statistical analysis,correlation analysis,multiple regression analysis and robustness test,finally through the analysis of the empirical results of this article research conclusion.This paper finds that :(1)the CEO's financial background is significantly negatively correlated with the company's stock price crash risk.When the CEO has financial background,the company's stock price crash risk is lower,indicating that the CEO's financial background can effectively suppress the stock price crash risk.(2)the greater the CEO's power,the more significant the negative correlation between the CEO's financial background and the risk of stock price crash.(3)when in bear market,the more significant the negative correlation between the CEO's financial background and stock price crash risk is;that is,when in bear market,CEO's financial background plays a more significant role in inhibiting effect on stock price crash risk.At the same time,this paper also found that there is a significant positive correlation between CEO shareholding ratio and stock price crash risk.The CEO's tenure is significantly negatively correlated with the risk of stock price crash.The longer the CEO's tenure,the greater the risk of stock price crash.This paper,for the first time,studies the impact of CEO's financial background on the stock price crash risk of listed companies from the perspective of executive career background characteristics,providing a new perspective for studying the impact factors of stock price crash risk.This paper further enriches the research content of the influencing factors of the stock price crash risk of listed companies,and also enriches the research content of the high-level echelon theory from the perspective of the characteristics of the executive career background.The research in this paper provides empirical evidence for listed companies to further improve the selection of senior executives,optimize the senior executives' team,strengthen the construction of senior executives' team,and effectively reduce the risk of stock price crash.It also has reference significance for the training of senior executives' professional quality.