Research On The Influence Of The Application Of Financial Derivative Instruments In Listed Companies On The Stock Price Crash Risk

In order to reduce various market risks in production and operation,more and more listed companies gradually accept and use financial derivatives.While financial derivatives help companies manage risks,they may also cause huge losses to companies due to high risks and high leverage.The stock price crash is a unique phenomenon in the capital market.The occurrence of a stock price crash will seriously damage the vital interests of investors,and will not be conducive to the healthy operation of the capital market.It has important theoretical and practical significance to study the impact of listed companies’ application of financial derivatives on stock price crash risk.This paper takes listed companies in the non-financial industry from 2007 to2020 as the object to study the impact of the application of financial derivatives on stock price crash risk.At the same time,it further analyzes the relationship between the application of financial derivatives and stock price crash risk under different property rights,internal control level and financial transparency,and the mediating effect of information asymmetry in the relationship between the two.The results show that the use of financial derivatives by companies will significantly reduce the risk of stock price crash.After the robustness test,the above conclusion still holds.This may be due to the fact that listed companies in my country’s non-financial industries mainly use financial derivatives for the purpose of hedging,thereby smoothing the volatility of corporate profits and cash flow,and reducing the risk of stock price crash.In the samples with state-owned,high level of internal control or high transparency,the application of financial derivatives will significantly reduce the risk of corporate stock price crash;in the samples of non-state-owned,low level of internal control and low transparency,the application of financial derivatives will significantly reduce the risk of corporate stock prices.The impact of crash risk is relatively insignificant.Through the intermediary effect test procedure,this paper finds that information asymmetry plays a partial intermediary role in the application of financial derivatives and stock price crash risk.Finally,based on the above results,this paper draws countermeasures and suggestions that listed companies should use financial derivatives for the purpose of hedging,improve corporate internal control,and enhance financial transparency.