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Cross-listing versus QFIIs: Foreign investors heterogeneity and stock price crash risk

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  • Zhuo, Qianyun
  • Liu, Xiaoli

Abstract

This study explores the different impacts of two types of foreign investors, cross-listing shareholders and QFIIs, on stock price crash risk. Based on panel regression analysis of Chinese A-share firms from 2007 to 2023, the findings reveal that cross-listing mitigates crash risk, while QFII ownership is positively related to it. The contrasting impacts can be attributed to the liquidity channel rather than external monitoring. Cross-listing shareholders reduce liquidity, whereas QFIIs enhance it, thereby explaining the divergent effects on crash risk. Both types of foreign investors can improve price informativeness as efficient external monitors. Heterogeneity analyses show that the positive relationship between QFIIs and crash risk is less pronounced in firms with lower levels of earnings management and lower turnover.

Suggested Citation

  • Zhuo, Qianyun & Liu, Xiaoli, 2025. "Cross-listing versus QFIIs: Foreign investors heterogeneity and stock price crash risk," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325010608
    DOI: 10.1016/j.frl.2025.107802
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