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JACIII Vol.27 No.6 pp. 1012-1024
doi: 10.20965/jaciii.2023.p1012
(2023)

Research Paper:

Stock Risk Warning and Financial Market Stability Based on the Perspective of Stock Price Crash Risk of Peer Enterprises

Jie Sun*, Mingyang Sun*,**,†, Xin Wang** ORCID Icon, and Yan Cheng***

*School of Accounting, Tianjin University of Finance and Economics
No.25 Zhujiang Road, Hexi District, Tianjin 300222, China

**Business School, Fuyang Normal University
No.100 Qinghe West Road, Yingzhou District, Fuyang, Anhui 236041, China

***School of Economics and Management, Anqing Normal University
No.1318 Jixian North Road, Yixiu District, Anqing, Anhui 246133, China

Corresponding author

Received:
January 10, 2023
Accepted:
March 23, 2023
Published:
November 20, 2023
Keywords:
stock risk warning, crash risk, peer enterprises, the idiosyncratic information content of the stock price
Abstract

This study empirically tests the effect of stock risk warning of listed companies on the risk of stock price crash of non-warning companies in the same industry and its mechanism in the Chinese A-share listed companies from 2008 to 2021 as samples. The research results show that the risk warning information has a capital market governance effect on peer companies, that is, the new risk warning information in an industry will alleviate the risk of stock price crash of peer companies. This conclusion remains robust after a series of robustness and endogeneity tests. The mediating mechanism test shows that the idiosyncratic information content of the stock price mediates the process of risk warning information affecting the risk of stock price crash of peer companies. The heterogeneity test shows that the governance effect of risk warning information on the risk of stock price crash of peer companies is more significant when the problem of company agency is more serious, the competitive market position is lower, or the differences in opinion among investors are smaller. This study provides empirical evidence for the necessity of the existence of the risk warning system. Additionally, it provides a reference for the capital market risk supervision of similar transition economies such as China.

Cite this article as:
J. Sun, M. Sun, X. Wang, and Y. Cheng, “Stock Risk Warning and Financial Market Stability Based on the Perspective of Stock Price Crash Risk of Peer Enterprises,” J. Adv. Comput. Intell. Intell. Inform., Vol.27 No.6, pp. 1012-1024, 2023.
Data files:
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