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Targeted Poverty Alleviation And Stock Price Crash Risk: Evidence From China

Author

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  • SHOUDONG CHEN

    (Center for Quantitative Economics, Jilin University, Changchun 130012, P. R. China†School of Business, Jilin University, Changchun 130012, P. R. China)

  • YUESHAN LI

    (��School of Business, Jilin University, Changchun 130012, P. R. China)

Abstract

Using manually collected samples on voluntary targeted poverty alleviation of 3418 Chinese firms for the period 2016–2019, we explore the impact of targeted poverty alleviation actions of listed companies on the stock price crash risk. Results show that listed companies participating in targeted poverty alleviation exhibited a lower risk of stock price crash risk; this conclusion is still valid after a series of robustness and endogeneity tests. This paper further explored its internal transmission routes. We found that the response of a public company to the targeted poverty alleviation policy will increase its positive coverages and plays the role of information intermediary and public supervision of media. Thus, the company’s behavior of hiding bad news is curtailed, and its future stock price crash risk is significantly reduced. For the government, China’s targeted poverty alleviation strategy is worthy of reference, while getting rid of poverty, the stock price crash risk of participating companies has also been effectively suppressed.

Suggested Citation

  • Shoudong Chen & Yueshan Li, 2023. "Targeted Poverty Alleviation And Stock Price Crash Risk: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(04), pages 1271-1301, June.
    • Handle: RePEc:wsi:serxxx:v:68:y:2023:i:04:n:s0217590821440033
    DOI: 10.1142/S0217590821440033
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    Citations

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    Cited by:

    1. Das, Kuntal K. & Yaghoubi, Mona, 2024. "Migration fear and stock price crash risk," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    2. Wu, Dan & Dai, Xingyu & Zhao, Ruikun & Cao, Yaru & Wang, Qunwei, 2023. "Pass-through from temperature intervals to China's commodity futures’ interval-valued returns: Evidence from the varying-coefficient ITS model," Finance Research Letters, Elsevier, vol. 58(PA).
    3. Gao, Yongjun & Mohd Saleh, Norman & Abdullah, Ahmad Monir & Adznan, Syaima, 2024. "Climate-related disclosures under the TCFD framework and business green innovation: Evidence from China A-share companies," Finance Research Letters, Elsevier, vol. 63(C).
    4. Kim, J.H. John & Anderson, Ronald, 2024. "CEO narcissism and the agency cost of debt," Journal of Empirical Finance, Elsevier, vol. 77(C).

    More about this item

    Keywords

    Targeted poverty alleviation; stock price crash risk; China’s stock market; corporate social responsibility;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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