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Targeting poverty alleviation and stock price crash risk

Author

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  • Shi, Xuanyi
  • Lin, Yongjia
  • Wang, Yizhi

Abstract

This study explores how participation in the Targeted Poverty Alleviation (TPA) program impacts the risk of stock price crashes among Chinese listed companies. The analysis demonstrates a significantly positive effect of TPA participation on price crash risk, with the results remaining robust across various tests. Mechanism analysis indicates that firms involved in the TPA campaign engage in higher earnings management, concealing negative information to maintain a positive reputation, which could trigger a price crash when the information is eventually disclosed. Moreover, we find that the effect of the TPA campaign is significantly stronger in companies with less institutional ownership.

Suggested Citation

  • Shi, Xuanyi & Lin, Yongjia & Wang, Yizhi, 2024. "Targeting poverty alleviation and stock price crash risk," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011887
    DOI: 10.1016/j.frl.2024.106159
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    References listed on IDEAS

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    2. Jia, Qinmin & Song, Zhihui & Huang, Xiaohong & Xuan, Quansheng, 2025. "The stock price crash risk of central firms in business groups," International Review of Financial Analysis, Elsevier, vol. 105(C).

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    Keywords

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • 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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