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M&A goodwill, information asymmetry and stock price crash risk

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Listed:
  • Wenwu Xie
  • Congying Ye
  • Tao Wang
  • Qitaisong Shen

Abstract

The collapse of stock prices have a huge negative impact on financial markets and the real economy, the mechanism and prevention methods of stock market crashes have become the focus of academic attention. This article takes Chinese A-share listed companies from 2008 to 2016 as samples and investigates the impact of M&A goodwill on the risk of stock price crashes. The study finds that, compared with non-goodwill companies, companies with goodwill have a greater risk of future stock price crashes; with the increase of goodwill value (GW), the risk of future stock price crashes increases significantly. Further research shows that the GW affects the risk of stock price crashes through information asymmetry at the corporate and market levels. This article not only deepens the research on the factors influencing the risk of stock price crashes, but also has great significance in understanding the role of M&A goodwill in the capital market and how to prevent stock price crashes and promote the orderly development of the capital market.

Suggested Citation

  • Wenwu Xie & Congying Ye & Tao Wang & Qitaisong Shen, 2020. "M&A goodwill, information asymmetry and stock price crash risk," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 33(1), pages 3385-3405, January.
    • Handle: RePEc:taf:reroxx:v:33:y:2020:i:1:p:3385-3405
    DOI: 10.1080/1331677X.2020.1773893
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    Cited by:

    1. Qingbang Mu & Wanxiao Zhang & Wenxiu Hu, 2023. "Enterprise Transformation and Innovation: A Study of Performance Compensation from the Perspective of Information Asymmetry," Sustainability, MDPI, vol. 15(17), pages 1-23, August.
    2. Shams, Syed & Bose, Sudipta & Sheikhbahaei, Ali, 2024. "Pricing media sentiment: Evidence from global mergers and acquisitions," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).

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