Institutional Investor Cliques,Accounting Conservatism And Stock Price Crash Risk

With the enhancement of the country’s comprehensive strength,although the development of China’s capital market is gradually improving,there are still problems such as not strict supervision of listed companies and easy rise and fall in stock prices.The sharp decline in stock prices in 2015 is still fresh in people’s minds,the broad market index dropped sharply from 5178 points to 2850 points,and institutional investors collectively sold their shares,causing Stocks such as Le TV and Zhongke Jincai to fall to a halt,bringing heavy losses to investors.In 2020,institutional investors held shares in industry leaders such as Sunshine Power and BYD and collectively ran away to sell stocks,resulting in a collapse in the company’s stocks and seriously infringing on the rights and interests of investors.As an institutional investor in the company’s external supervision,whether it will strengthen corporate governance or hide the company’s insider information after the group,increasing the information asymmetry and causing the company’s stock price to collapse is worth studying.Accounting soundness is a means of internal governance of the company,in order to record the company’s losses relatively quickly,postpone the recognition of the company’s economic gains,this prudent principle,through accounting information to improve the transparency of the company’s information,the company’s negative information to the market,affecting the company’s stock price.Therefore,this article will focus on exploring the mechanism of institutional investors holding groups and stock price collapse,while introducing accounting soundness,exploring how the relationship between the two has changed,which is of great significance for promoting the healthy development of the market and protecting the interests of investors.Based on the theoretical basis of information asymmetry theory and social network analysis,this paper selects a total of 15291 annual data of China’s Shanghai and Shenzhen A-shares from 2006 to 2020 for research,and uses models such as least squares(OLS)and regulatory effects for empirical analysis.First,if the proportion of any two institutional investors holding the same company’s stock at the same time exceeds five percent,it is considered that they have established a connection between them,and thus form a network of institutional investors,and then extract institutional investor groups through the Louvain algorithm to study whether they can reduce the risk of the company’s stock price crash.Then,through the empirical model,the test analysis is carried out to verify whether the company’s accounting soundness can inhibit the company’s collapse.Finally,focusing on the soundness of accounting,it is explored whether it can alleviate the collapse of stock prices caused by institutional investors holding shares by reducing information disclosure.Through the above empirical test analysis,the results are as follows:(1)Institutional investors grouping and the company’s stock price collapse have a positive impact,that is,the market institutional investors holding shares in a group will not only hide the inside information obtained by themselves,but also weaken the supervision effect of the company’s management in hiding the company’s negative news,thereby significantly increasing the company’s information asymmetry and causing the company to have a stock price collapse risk.(2)The company that uses the prudent accounting policy discloses the true operation of the company to the public by timely deducting the expenses that may occur in the company,and only when the economic benefits really flow into the company can be included in the accounting account,and the bad news of the company is made public,so as to reduce the collapse of the company’s stock price.(3)Accounting soundness can expose the negative news that institutional investors hold shares and the company’s management deliberately conceals,thereby alleviating the stock price crash caused by the company’s negative news hoarding.Combined with the conclusions,it is recommended to strengthen the improvement of the company’s accounting soundness,standardize and guide the investment behavior of institutional investors,and strengthen the emphasis on investors’ own education.