Study On The Impact Of Firm Crisis Self-Disclosure On Stock Reaction

The occurrence of crisis often leads to the loss of personnel and property,interferes with the normal production and operation of firms,and causes adverse effects.In view of the mandatory disclosure requirements,accident announcement is a widely used means of crisis communication by listed firms,and the public mainly understand the reasons,progress and impact of the accident through the content of the announcement.Researches on the impact of firm crisis,the disclosure of crisis and the role of infomediary are of great significance for firms to effectively manage the crisis and continue to operate.Based on the previous literature,this paper combs the crisis theory and crisis communication theory,combines the theory of infomediary,takes the firm accident announcement as an example,analyzes the process of the reaction of stakeholders to different firm crisis information in detail,and discusses the moderating role of infomediary in crisis situations.The current researches mainly focus on the impact of an accident on the stock response.However,the impact of the disclosure of crisis information is continuous,the changes in investors' attention to the contents of the accident announcement at different times have not been studied.This research supplements this gap.Previous studies on accidents mainly focused on specific types of accidents and the main research objects were developed countries or countries prone to specific accidents.And most studies pay more attention to the impact of accidents on the stock market,while empirical research based on data provided by Chinese firm accident announcements is still relatively lacking,this article supplements empirical research in this area.220 safety accident announcements from China's A-share listed firms from 2007 to 2018 are collected and quantified,and the negative stock reaction to firm accidents is confirmed by event study.In addition,based on stakeholders' perception of environmental uncertainty,the multi-regression method is used to explore the process of stakeholders' response to the self-disclosure of firm crisis.The empirical results show that in the short period after the accident announcement,stakeholders are more concerned about the loss of personnel,property damage and the response speed of firms.But after a long time,the negative reaction to the future uncertainty of the accident is stronger.Therefore,the sequence of stakeholders' response to the self-disclosure of firm crisis is from influence uncertainty,response uncertainty to state uncertainty.At the same time,this article finds that media coverage and analyst recommendations have moderating effects on the relationship between the impact of firm crisis self-disclosure on stock reaction in crisis situations.If the accident has not attracted much attention from the media,the stock reaction of firms that have stolen thunder will be better,but if the media has released plenty of news about the accident,then the strategy of stealing thunder is not effective.What's more,historical analysts' recommendations providing a buffer for stock responses when accident announcements show uncertainty for the future.This paper validates the application of signal theory and crisis communication theory in crisis situations,supplements empirical research in corporate crisis management,and provides suggestions for firms publishing crisis self-disclosure in reality.The conclusions of this paper help firms make better use of crisis response strategies to reduce the damage caused by the crisis and improve their ability to communicate with the crisis.