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Leverage adjustment behaviors and stock price crash risk

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  • Su, Shiwei
  • Jia, Songbo
  • Shi, Guangping

Abstract

This paper explores the relationship between the leverage adjustment behavior and the risk of stock price crash. Selecting the data of China's A-share listed companies from 2011 to 2021 as the research sample. The results show that, the leverage adjustment behavior will increase firms’ stock price crash risk; the positive relationship between the leverage adjustment level and stock price crash risk of state-owned listed companies is more significant than that of non-state-owned listed companies; further analysis finds that when the information asymmetry is higher, the leverage adjustment behavior will further increase firms’ stock price crash risk.

Suggested Citation

  • Su, Shiwei & Jia, Songbo & Shi, Guangping, 2023. "Leverage adjustment behaviors and stock price crash risk," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005287
    DOI: 10.1016/j.frl.2023.104156
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    Cited by:

    1. Jia, Haibo & Zhu, Ying & Chen, Xiaodan, 2024. "Stock Repurchase and Stock Price Crash Risk," Finance Research Letters, Elsevier, vol. 60(C).
    2. Sun, Guanglin & Yin, Ding & Kong, Tao & Yin, Lei, 2024. "The impact of the integration of the digital economy and the real economy on the risk of stock price collapse," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    3. Zhu, Ruoyu & Xin, Xiaohui & Tan, Kehu, 2024. "Reverse mixed ownership reform: Does state-owned capital injection inhibit corporate leverage manipulation?," Finance Research Letters, Elsevier, vol. 59(C).

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