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Information interaction among institutional investors and stock price crash risk based on multiplex networks

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  • Li, Jie
  • Zhou, Zhong-Qiang
  • Zhang, Yongjie
  • Xiong, Xiong

Abstract

Using a large sample of A-share listed companies on the Chinese stock market, we investigate the impact of information interaction among institutional investors (IIAII) on stock price crash risk. IIAII is measured using a multiplex network constructed from data on the multiple social relations of institutional investors. We find a positive and significant relationship between IIAII and crash risk. The results of the influencing mechanism analysis show that IIAII influences crash risk through the herd effect rather than the monitoring effect. Overall, our findings elucidate the important role of institutional investors in corporate governance and promote the application of multiplex network theory to the financial field.

Suggested Citation

  • Li, Jie & Zhou, Zhong-Qiang & Zhang, Yongjie & Xiong, Xiong, 2023. "Information interaction among institutional investors and stock price crash risk based on multiplex networks," International Review of Financial Analysis, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finana:v:89:y:2023:i:c:s105752192300296x
    DOI: 10.1016/j.irfa.2023.102780
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    More about this item

    Keywords

    Information interaction; Crash risk; Multiplex network; Institutional investor;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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