 Official visits and stock price crash riskYanping Wang, Ke Qiao, Qiuhang Xing and Yunxia Bai Pacific-Basin Finance Journal, 2024, vol. 87, issue C Abstract: Against the backdrop of continuous stock price crashes, preventing stock price crash risk has become an increasingly important item on the Chinese government's agenda in recent years. Using a unique dataset on official visits manually collected from news reports posted on corporate websites during the 2010–2020 period, we examine the impact of official visits on the stock price crash risk of visited companies. We find that official visits contribute to a reduction in stock price crash risk. This effect is more pronounced among privately controlled companies, information-opaque companies, and financially constrained companies. Taking the political rankings of visiting officials into consideration, we find that municipal officials have a more significant influence on stock price crash risk. We further establish the underlying mechanisms and find that official visits reduce crash risk through the provision of more preferential resources, such as government subsidies and bank loans, and by attracting more public attention, such as media and analyst coverage. Overall, our research provides evidence on how officials can prevent stock price crash risk. Keywords: Official visits; Stock Price crash risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:87:y:2024:i:c:s0927538x24002270 DOI: 10.1016/j.pacfin.2024.102475 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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