Research On The Influence Of Common Ownership On The Risk Of Stock Price Crash

Share price collapse is a devastating blow for the enterprise,is also a great challenge to stable operation of the capital market.Large areas of share price collapse even lead to financial crisis,is a great threat to the economic development of a country and the world,“crazy-overheating-panic-crash” periodic stage,makes the share price collapse become a potential “land mines” in the capital market.The risk of collapse in stock price has been highly valued by the practical and academic circles and has become an enduring topic in finance fields.However,at present,most scholars explore the factors and mechanisms affecting stock price crash risk from the internal and external environment of enterprises,and few scholars elaborate collapse mechanism from the perspective of corporate ownership connection.Therefore,based on the background that common ownership is becoming more and more common in the capital market,this paper tries to discuss whether and how common ownership influences stock price crash risk.Whether common ownership reflects “collusion in market” or “synergistic effect” is a hot topic discussed by the academic circles at present.Using data of listed companies in China from 2007-2020 as sample and supported by social network theory,resource dependence theory,principal-agent theory and shareholder activism theory,this paper mainly discusses the internal relationship and underlying mechanism between common ownership and the future stock price crash risk.We find that stock price crash risk is significantly and negatively associated with the common owners,that is,the impact of common ownership on stock price crash risk is mainly reflected in the “synergistic effect”.Additionally,the uncertainty of economic policy and the degree of industry competition strengthen the collaborative governance effect of chain shareholders on stock price crash risk.Considering that the model may have endogeneity problems,the instrumental variable method,heckman two-stage regression method and propensity score matching method were used to test the robustness of the model,and the conclusion was still valid.Further study also shows that the synergistic effect of common ownership is mainly realized by appointing management and curbing over-investment.Lastly,we find that the institutional chain shareholders,overseas chain shareholders and state-owned chain shareholders are the "main force" that inhibit the stock price crash risk of enterprises.In addition,the synergistic governance effect of chain shareholders is more significant in the samples with high marketization degree,non-state-owned enterprises,high financing constraints and low quality of information disclosure.This paper theoretically expands and deepens the research literature in the fields of common ownership and stock market crash risks.In practice,it provides empirical evidence for regulators,listed companies and investors to better understand the economic consequences and mechanism of common ownership and also provides positive ideas for common ownership to participate in corporate governance.