Stock Price Crash Risk and Financing Constraints: An Explanation Based on the Moderate Effect of Corporate Performance: Empirical Evidence from Shanghai and Shenzhen A-share Listed Companies

Yufei Song; Kehan Ma

doi:10.54691/bcpbm.v19i.734

Authors

Yufei Song
Kehan Ma

DOI:

https://doi.org/10.54691/bcpbm.v19i.734

Keywords:

corporate performance, stock price crash risk, capital market, financing constraints

Abstract

The stock price crash risk and financing constraints are the focus of current social concerns, and the moderating effect of corporate performance on them has also been focused. This paper uses the data of China's A-share listed companies in 2018 to study the interaction mechanism and relationship among corporate performance, the stock price crash risk and financing constraints. The results show that the stock price crash risk significantly increases the degree of financing constraints, and good corporation performance reduces the increasing effect of stock price crash risk on financing constraints. Further robustness test shows that this conclusion holds for all enterprises of different ownership, and is more obvious for enterprises of larger size. The research conclusions not only enrich the literature on corporate performance, financing constraints and stock price crash risk, but also have important referenced value for reducing the stock price crash risk. Additionally, it promotes the healthy and stable development of China's capital market.

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