Institutional investor networks and crash risk: Evidence from China

Fangzhou Li and Yuxiang Jiang

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: We examine the impact of institutional investor networks on stock price crash risk in China. Using data from 2007 to 2019 on Chinese institutional investors, we document that well-connected institutions (i.e., institutions in the institutional investor network) from more central network positions can increase stock price crash risk more than other investors. The documented effect is robust to endogeneity concerns. We also find that the role of institutional investor networks in increasing crash risks is partially attributed to reduced accounting conservatism and investor herding. Our article sheds light on the effects of institutional investor networks on stock price crash risk.

Keywords: Institutional investor networks; Crash risk; Mutual funds; China (search for similar items in EconPapers)
JEL-codes: D85 G23 G32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s154461232100564x

DOI: 10.1016/j.frl.2021.102627

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