The Impact And Mechanism Of Digital Finance On Stock Price Crash Risk

With the development of China’s capital market,more and more companies are listed for financing transactions,and the securities market is affecting more and more investors.The collapse of a company’s share price not only damages the interests of shareholders,but its stability also affects the entire capital market.Digital finance has gradually developed along with the generation of digital technologies such as big data,cloud computing and blockchain,and has an impact on the risk of company share price collapse by virtue of its technical advantages,easing corporate financing constraints and reducing information asymmetry.Therefore,this paper explores the impact of digital finance on the risk of corporate share price collapse from the company’s perspective,combining theories of information asymmetry and principal-agent.After combing through the relevant literature,this paper selects the data of A-share listed companies from2012-2021 as the research sample to analyze and empirically test the impact of digital finance on the company’s share price crash risk and its mechanism.The results show that(1)digital finance helps to reduce the risk of company’s share price collapse.Further,this paper uses the mediation model to test the impact mechanism and concludes that(2)digital finance can reduce the risk of corporate stock price crash by alleviating corporate financing constraints;(3)digital finance reduces the risk of corporate stock price crash by reducing corporate inefficient investment;(4)digital finance reduces the risk of corporate stock price crash by moderating the herding effect brought about by analyst attention.In addition to that,this paper finds that(5)digital finance makes the aggressive surplus adjustment of firms more significant,which aggravates the risk of stock price collapse of firms.Meanwhile,through the heterogeneity test,this paper confirms that digital finance can indeed complement the resource mismatch problem of traditional finance,which adds a theoretical basis for promoting the development of digital finance.The research in this paper provides meaningful references on how to stabilize financial markets and reduce the risk of stock price crashes.Listed companies should pay attention to "digitalization" and embrace emerging technologies,while improving the internal governance structure of the company,attaching importance to the decision-making process of investment,improving investment efficiency,developing a strict information disclosure system,and reflecting company information truthfully,accurately,and completely;investors should enhance their financial literacy and make investment choices by combining multifaceted information.Investors should enhance their financial literacy and make investment choices by combining multifaceted information,rather than blindly following the crowd and causing herding effect;regulators should pay attention to guiding the development of digital finance and regulate it,while urging companies to make good information disclosure,guiding market investors to make value investments and reducing irrational behavior.This paper innovatively selects the research perspective of digital finance and stock price collapse risk,which complements the research in related fields,and also proposes the influence mechanism from multiple dimensions inside and outside the enterprise,combining theories to open the black box of the mechanism of action.