EconPapers    
Economics at your fingertips  
 

Equity index futures trading and stock price crash risk: Evidence from Chinese markets

Jinyu Liu and Rui Zhong

Journal of Futures Markets, 2018, vol. 38, issue 11, 1313-1333

Abstract: Equity index futures are often blamed for exacerbating equity price crash risk although there is little empirical evidence to support the accusation in the literature. We find that Chinese equity index futures trading significantly reduces stock price crash risk. This negative relationship is strengthened by institutional ownership and weakened by a controlling shareholders’ incentive to elude external monitoring, such as the divergence of control and cash‐flow rights of dominant shareholders, the block holdings of the largest shareholders, and state ownership. Our findings reveal the positive externality of financial derivative innovation on equity market stability.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1002/fut.21933

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:wly:jfutmk:v:38:y:2018:i:11:p:1313-1333

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0270-7314

Access Statistics for this article

Journal of Futures Markets is currently edited by Robert I. Webb

More articles in Journal of Futures Markets from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2020-07-04
Handle: RePEc:wly:jfutmk:v:38:y:2018:i:11:p:1313-1333