The perception of stock Crash risk, Firm information manipulation and Dynamic adjustment of capital structure
Read
DownLoad |
| Title | The perception of stock Crash risk, Firm information manipulation and Dynamic adjustment of capital structure
|
| Author | Xiaolong Gu, Linlin Zhang, Donghui Li |
| Organization | Guangdong university of Finance and Economics; Sun Yat-Sen University; Jinan University |
| Email | pawdragon@163.com；shui_zi_liu@163.com；lidonghui@jnu.edu.cn |
| Key Words | Crash Risk; Risk Perception; Real Earnings Management; Speed of Leverage Adjustment; Marketization |
| Abstract | The continuous optimization of capital structure of is an important financial decision. We employ a panel of 1656 Chinese A-share listed companies from 2006 to 2014, studying how firms adjust its capital structure under different crash risk exposure. We find that SOA is slower in firms with higher crash risk exposure which is consistent with An et al., (2015). Furthermore, REM mitigates the negative correlation between crash risk exposure and SOA. And, the above findings are more announced in regions with high marketization index. Based on behavioral finance theory, our paper examines the transmission mechanism and external conditions with which firms ‘specific risk is transferred to capital suppliers, further extending the research perspective for stock price crash risk. |
| Serial Number | WP1231 |
| Time | 2017-10-20 |
|