Study On The Relationship Between Pyramid Shareholding Structure And The Risk Of Stock Price Crash Of Listed Companies

Stock price collapse risk is a risk of a sudden and dramatic drop in stock prices of individual stocks or the whole market for an indeterminate duration,which can bring a series of problems to the capital market.Pyramid equity structure is a hierarchical holding equity control structure,which is common in both domestic and international theory and practice.Scholars have mostly explored the causes of share price collapse risk in terms of executive characteristics,shareholder characteristics,internal control,and performance forecasts,but the relationship between pyramid equity structure and share price collapse risk has been less studied and contradictory in some issues,which provides an opportunity for this paper to study.This paper adopts an empirical analysis method to explore the impact of pyramid equity structure on stock price crash risk in three dimensions: ultimate controller control,cash flow power and the degree of separation of two powers,and further explores the mechanism of its effect from the perspective of risk taking and agency cost,taking the listed companies in Shenzhen and Shanghai A-shares from 2010 to 2020 as the research object.The study finds that: ultimate controller control significantly reduces the risk of future stock price collapse,cash flow rights are significantly and negatively related to the risk of stock price collapse,and the degree of separation of powers increases the risk of future stock price collapse.There is a significant mediating effect of the level of corporate risk-taking,and agency costs between pyramid equity structure and share price crash risk.Further study finds that audit quality,the level of institutional investors’ shareholding,and the nature of ownership all affect the inhibitory effect of ultimate controller control on stock price crash risk.The study results remain robust after a series of robustness tests.The findings of this paper provide new empirical evidence to study the effect of pyramidal equity structure on stock price crash risk,enrich the relevant research literature,and have some theoretical significance.It also provides a reference basis for firms to adjust their equity structure,investors to make investment decisions,and regulators to allocate regulatory resources,which has some practical significance.