Investor Sentiment And Stock Price Crash Risk

Since China's reform and opening up,the financial situation and financial market have changed a lot.The stock market has also developed from the initial germination to the current prosperity.Whether it is domestic or foreign,the stock market value and stock price have increased greatly.But we also can't ignor the share price collapse that occur over a period of time,such as the U.S.subprime crisis of 2008,not only bring huge impact to U.S.financial market,in the United States financial system collapsed,into a debt crisis,but also has brought the global financial market turbulence,the economic development of all countries are faced with the problem of insufficient funds.Our country has also been implicated in this crisis,with the stock market plummeting in 2007-2008,which of course also contributed to the accumulation of problems in China's stock market.In iddition,stock price crash or shares tumbled will bring a series of heavy and deep consequences.First,stock price crash will make investors lose confidence,have no expectations for the future of the stock market,and make pessimistic judgment on the future earnings of stock price,thus exacerbating the crash;Second,there is a lot of literature suggesting that share price crashes are contagious and likely to lead to a global stock market crisis.Finally,the collapse of stock prices may lead to the lack of effective and reasonable allocation of social resources,leading to the recession of the real conomy.Therefore,the study of stock price crash risk has very important practical significance.Traditional economic theory holds that under the efficient market hypothesis,information about the future performance of stock prices is already reflected in stock prices.What leads to stock price volatility is the emergence of new information,but the emergence of new information is uncertain and cannot be predicted in advance,so stock price is also unpredictable.Stock prices are unpredictable until the big news comes out,so traditional finance can no longer explain them,so behavioral finance emerges.China's financial market started late with an immaturity development and retail investors occupy most of the market,these individiual investors often do not have perfect financial knowledge,lack of rationality,like to blindly follow the crowd and easy to be dominated by emotions.Behavioral finance and economic theory takes the irrational factors of investors into the model,which can better study the mechanism behind the investor's investment choices,and the research on investor sentiment is one of the important theories.The study on investor sentiment is one of the important theories,so it is necessary to construct the comprehensive index of investor sentiment to study the stock price crash risk.In addition,the domestic and foreign scholars agree that stock price crash risk accumulates mainly because of the bad news after an explosion,the main body of the bad news to hide is the company's internal personnel,has an inseparable relationship with corporate governance,so this paper choose equity concentration as a intervening variable to make the detailed studies of the relationship between investor sentiment and stock price crash risk.In recent years,with the development of behavioral finance,some stock price crashescan no longer be explained by traditional finance,and the irrational behavior of investors has been widely concerned by scholars at home and abroad,especially from the perspective of investor sentiment.Based on the A-share listed companies as the research object,this paper selected the A-share listed companies from 2002 to 2017 data as the research sample,using principal component analysis constructs the comprehensive index of stocks investor sentiment.We research the investor sentiment influence on stock price crash risk,and from the perspectives of ownership concentration and further study of the investor sentiment,equity concentration,the relations between and among stock price crash risk.The results show that:(1)there is a significant positive correlation between investor sentiment and stock price crash risk;(2)there is a significant negative correlation between ownership concentration and stock price crash risk;(3)there is a significant negative correlation between investor sentiment and ownership concentration;(4)ownership concentration has significant mediating effect on the impact of investor sentiment on stock price crash risk.