Goodwill Impairment And Stock Price Crash Risk

With the increasing frequency of mergers and acquisitions in China's capital market,a large amount of goodwill is generated.However,the goodwill formed with high-premium mergers and acquisitions often fails to bring expected excess returns,which eventually leads to high-value goodwill impairment charges.It damages the value of the company and makes the company face the higher risk of stock price crash in the future.Therefore,the research on the internal mechanism of goodwill impairment and stock price crash risk and how to reduce the stock price crash risk has become the focus of attention in the capital market.Securities analysts,as important information intermediaries in the capital market,are theoretically believed that they can improve the information environment and reduce the risk of stock price crash.However,when facing conflicts of interest,analysts tend to release optimistic reports,which aggravates the degree of market information asymmetry and is not conducive to the stability of stock prices.Based on this background,it is of practical significance to explore the role of analysts between the impairment of goodwill and the risk of stock price crash.Through relevant literature review and theoretical analysis,this thesis uses the listed companies in China's A-share market spanning from 2008 to 2016 as a research sample to conduct an empirical study.It examines the impact of goodwill impairment on the risk of stock price crash and the specific impact between the two under different property rights.At the same time,it examines how the analyst coverage as a moderating variable to influence the relationship between the goodwill impairment and the stock price crash risk.We find the following conclusions:(1)The goodwill impairment reflects the management's deliberate concealment of bad news of mergers and acquisitions.If the impairment of goodwill is greater,it means that the company's information transparency is lower and the risk of future stock price crash is increased.The positive relationship between the impairment of goodwill and the risk of stock price crash is more obvious in state-owned enterprises;(2)The analyst's compromise on conflicts of interest has led to the release of optimistic forecasts,making it impossible for investors to understand the true situation of the company in time and worsening the market information environment to some extent The analyst coverage enhances the positive correlation between the goodwill impairment and the stock price crash risk.This thesis has enriched the research on the goodwill impairment,and also perfected the research on factors that affect the risk of stock price crash.It has some enlightening effects on guiding the company's rational mergers and acquisitions,strengthening information disclosure,and managing external oversight factors such as analysts.