The Research On Managerial Ability On The Stock Price Crash Risk

The stock price of listed companies has fallen sharply from time to time.After the financial fraud of "Yinguangxia" in 2001,its stock price experienced 15 consecutive limits;Volkswagen's share price plunged by 40% in 2015 by falsifying its emissions;In 2017,the stock price of Shandong “Molong” limit-down after it was exposed as a fictitious high profit.It is difficult to predict the stock price crash risk.And it brings immeasurable property losses to investors,which seriously affects the smooth operation and healthy development of China's capital market.In the current securities market environment,the prediction of stock price crash and how to restrain the risk of future stock price crash have always been one of the important areas for scholars to study.Managerial ability as an important human capital in daily business activities,investment and financing decisions of enterprises,previous studies have focused on the role of its internal governance,but neglected its impact on the capital market.From the perspective of managerial ability,this paper studies the impact of managerial ability on the stock price crash risk and whether the relationship is different between managerial ability and stock price crash risk under different property rights.Deepening the understanding of stock price crash risk and enriching the study of managerial ability's economic consequences.It can have important guiding significance for the human resource management and exerting internal supervision of enterprises to stable operation of capital market.Firstly,according to the upper echelons theory,principal-agent theory,reputation mechanism,information asymmetry theory and signal transmission theory,this paper analyses the relationship between managerial ability and the stock price crash risk and the nature of property rights.Secondly,based on the data of Shanghai and Shenzhen A-share listed companies from 2008 to 2017,we use data envelopment analysis(DEA)and TOBIT regression model to measure managerial ability.The relationship between managerial ability,property rights and stock price crash risk is empirically tested.At the same time,we further analyses the difference of the relationship between managerial ability and stock price crash risk under different agency costs and different equity pledges,and the intermediary effect of accounting conservatism in the relationship.The research finds that the stronger managerial ability,the less their own cover-up behavior and the degree of information asymmetry will be reduced,thus reducing the stock price crash risk in their enterprises.After distinguishing between state-owned enterprises and non-state-owned enterprises,it is found that the relationship between managerial ability and stock price crash risk is more significant in non-state-owned enterprises,which may be the different employment mechanisms between them.In further research,the negative correlation between managerial ability and stock price crash risk is more significant in enterprises with higher dual agency cost and large shareholder equity pledge.Through path analysis,it is found that earnings information conservatism playing a part of intermediary role in managerial ability and stock price crash risk.Finally,based on the above analysis,this paper draws inspiration from strengthening managerial ability and building managers' comprehensive evaluation system,perfecting competitive managers' market,strengthening capital market system and improving enterprise information environment,perfecting legal system and optimizing supervision environment.