Research On The Effect Of Employee Welfare Level On Stock Price Crash Risk

In recent years,because of the rapid development of economy,a large amount of liquidity funds into the stock market.With money moving around on a large scale,stock prices in some industries could fluctuate wildly,or even crash.If this phenomenon is not properly managed,it will not only have a negative impact on the wealth of investors,but also seriously affect the stable operation of our capital market.There are many hypotheses about stock price crash risk,but the current mainstream hypothesis is "information hiding hypothesis".Managers have certain discretion in corporate decision-making and can choose to conceal or release corporate information.If they choose the former,when the undisclosed negative information accumulates and reaches the upper limit that the company can bear,they will suddenly and centrally release it to the market.Triggering a crash in stock prices.At present,the research on the risk of stock price crash mainly starts from internal factors such as the company’s operating conditions,characteristics of directors and senior executives,as well as external factors such as external audit and institutional investors.However,as an important group in the company’s operation,employees are rarely involved in the literature.Based on this,this paper discusses how the level of employee benefits influences the risk of stock price crash.Our sample includes A-share listed companies in Shanghai and Shenzhen from the end of 2010 to the end of 2020.We use the employee responsibility score in the corporate social responsibility report disclosed by Hexun.com to measure the level of employee welfare and carry out an empirical study on the relationship between the level of employee welfare and the risk of stock price crash.The results show that employee welfare level has a significant negative impact on stock price crash risk.In the heterogeneity analysis part,the sub-samples are divided by the nature of property rights,the degree of product market competition,employee loyalty and ownership concentration,and the group regression results show that the impact of employee welfare level on the risk of stock price crash is different in the case of different property rights,the degree of product market competition,employee loyalty and ownership concentration.Specifically,the level of employee welfare plays a more obvious role in suppressing the risk of stock price crash in state-owned enterprises,enterprises with low product market competition,low employee loyalty and low ownership concentration.Next,this paper analyzes the mechanism of employee welfare level acting on the risk of stock price crash.This paper finds that the negative impact of employee welfare level on the risk of stock price crash is mainly transmitted through the channels of earnings management level and enterprise innovation output.We find that employee welfare can reduce the probability of stock price crash by reducing the level of earnings management and improving the innovation output.In the part of endogeneity and robustness test,this paper firstly uses the mean value of employee welfare level of other companies in the same industry as the instrumental variable for endogeneity control to solve the possible influence of missing variables,and the results obtained are consistent with the main regression results.The robustness test of the research results of this paper is carried out through two-period lagged regression of explanatory variables and replacement of explained variables.The results show that the conclusions of this paper are still robust under different circumstances.At the end of the article,all the conclusions are sorted out and summarized,and some suggestions are put forward.From the perspective of corporate employee welfare,this paper studies how employee welfare level affects the risk of stock price crash and enriches the empirical research on employee welfare and stock price crash risk.This paper helps enterprises pay attention to the internal responsibility of employee welfare and provides a new perspective for the study of stock price crash.