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Ownership structure, audit quality, board structure, and stock price crash risk: Evidence from China

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  • Yeung, Wing Him
  • Lento, Camillo

Abstract

This paper explores whether or not a Chinese firm's ownership structure, audit quality, and board structure are associated with its future stock price crash risk. We find that stronger ownership structure and higher audit quality are associated with lower stock price crash risk, and the association is stronger since the IFRS and split-share reforms than before them. The results are consistent across two different measures of crash risk, as well as robust to endogeneity tests. We also find that board structure is not significantly associated with stock price crash risk.

Suggested Citation

  • Yeung, Wing Him & Lento, Camillo, 2018. "Ownership structure, audit quality, board structure, and stock price crash risk: Evidence from China," Global Finance Journal, Elsevier, vol. 37(C), pages 1-24.
    • Handle: RePEc:eee:glofin:v:37:y:2018:i:c:p:1-24
    DOI: 10.1016/j.gfj.2018.04.002
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    More about this item

    Keywords

    Future stock price crash risk; Chinese-listed firms; Ownership structure; Board structure; Audit quality;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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