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The impact of industry prosperity on stock price crash risk

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  • Di, Hanmei
  • Liu, Qingzhi
  • Liu, Shanshan

Abstract

This paper analyzes the impact of industry prosperity on the risk of share price collapse among China's A-share listed companies from 2016 to 2022, focusing on the intermediary role of analysts' forecasting behavior. The study reveals that heightened industry prosperity decreases the risk of future share price collapses, primarily by attracting more analyst attention and improving investor sentiment. Notably, private firms' share price crash risk is more sensitive to industry sentiment than state-owned enterprises, potentially due to differences in business strategies and risk tolerance. The findings contribute to the understanding of stock price crash risk factors and offer valuable insights for investors and regulators.

Suggested Citation

  • Di, Hanmei & Liu, Qingzhi & Liu, Shanshan, 2025. "The impact of industry prosperity on stock price crash risk," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325006294
    DOI: 10.1016/j.frl.2025.107369
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    References listed on IDEAS

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