Outward FDI and stock price crash risk---Evidence from China

Haiyue Liu, Yile Wang, Ling Huang and Xueyong Zhang

Journal of International Financial Markets, Institutions and Money, 2021, vol. 73, issue C

Abstract: This paper examines the impact of Chinese outward foreign direct investment (OFDI) on stock price crash risk, based on 6273 OFDI events completed by 1541 A-share listed companies in 128 host countries from 2000 to 2018. Using a propensity matching score (PSM) method and difference in differences (DID) estimation, we find that OFDI reduces the stock price crash risk of the investing company, and the effect is more pronounced in host countries that own better institutional environments. The mechanism analyses find that the impact of OFDI on stock price crash risk is more significant when the companies invest in areas where business is more convenient, the protection of minority investors is greater, and information disclosure is more complete.

Keywords: OFDI; Stock price crash risk; Information disclosure; Institutional quality; PSM-DID (search for similar items in EconPapers)
JEL-codes: G11 G12 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443121000858
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:73:y:2021:i:c:s1042443121000858

DOI: 10.1016/j.intfin.2021.101366

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().