The Impact Of Government Connections Of Executives On Stock Price Crash Risk

After thirty years of continuous development,Chinese stock market plays a more and more important role in the domestic financial market,but there are still many imperfections.In recent years,the stock price crash of Chinese public companies has become more and more serious.The "sharp rise and sharp fall" of stock prices is not only detrimental to the stability of the domestic financial market,but also damages the interests of most investors and increases the systemic risk of the financial market.Given that the government association of corporate executives has a relatively important impact on public companies,and existing studies have shown that enterprises around the world generally have a close relationship with the government,this study introduces the perspective of the research on the factors influencing the risk of stock price crash of public companies into the government association of corporate executives.The government association of corporate executives has a dual impact on enterprises,which not only has a positive impact,such as access to financing facilities,access to scarce resources and institutional protection,but also has a negative impact,such as inhibiting the innovation ability of enterprises,reducing the quality of accounting information and fulfilling more social responsibilities.At the same time,this paper is further expanded to explore the impact of corporate executives’ government affiliations on stock price crash risk under different industries.This study selects Chinese A-share public companies from 2007 to 2019 as data samples.Through sorting out relevant research results at home and abroad,this paper uses methods such as variable descriptive statistical analysis,correlation test,multiple regression analysis and robustness test to investigate the impact of executive government association on the risk of stock price crash of enterprises.The results show that:(1)In the whole sample,the government association of executives has a stock price crash effect,which has a significant positive impact on the risk of stock price crash,that is,the existence of government association of executives intensifies the risk of stock price crash;(2)The influence of the government association of the top executives of public companies in different industries on the risk of stock price crash is different.The government association of the top executives of public companies in non-ferrous metal industry,media industry and mining industry has a significant positive impact on the risk of stock price crash,and the existence of the government association of the top executives intensifies the risk of stock price crash.However,such as the public utility industry and other public companies,the existence of executive government association has a significant negative impact on the risk of stock price collapse,the existence of executive government association can effectively reduce the probability of future stock price collapse.In addition,there are some industries in which the government association of the executives of public companies has no obvious correlation with the risk of stock price collapse.(3)The influence mechanism of executive government association on stock price crash risk of public companies in different industries is different.The existence of foreign donations in the public utility industry significantly strengthens the negative relationship between the government affiliations of senior executives of public companies and the risk of stock price collapse,and there is a partial mediating effect of analyst attention on this negative relationship.In the mining industry,government subsidies have a significant partial mediating effect on the positive relationship between the government association of company executives and the risk of stock price crash.In the media industry,government subsidies and analysts’ attention have a complete mediating effect on the positive relationship between the government association of company executives and the risk of stock price crash.The research of this study has certain theoretical and practical significance.In terms of theory,this paper enriches the related research on stock price crash risk by studying the influence of government association of executives of public companies in different industries on the risk of stock price crash.In reality,the study on the impact of executive government association of public companies in different industries on the risk of stock price crash is conducive to investors’ reasonable view of the role of executive government association,and provides certain guiding significance for reducing the systemic risk of Chinese financial market and maintaining the stable development of the stock market.In addition,the research of this paper can provide some reference value for the policy making of regulatory institutions.