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Monetary policy uncertainty, inefficient investment, and stock price crash risk

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  • Ye, Yilin

Abstract

Based on the panel data of China's A-share listed companies from 2014 to 2023, this paper explores the impact of monetary policy uncertainty on stock price crash risk and its underlying mechanism. The study finds that monetary policy uncertainty significantly increases stock price crash risk. Mechanism tests show that monetary policy uncertainty exacerbates stock price crash risk by increasing inefficient investment. Heterogeneity analysis reveals that the positive impact of monetary policy uncertainty on stock price crash risk is more pronounced in state-owned enterprises and smaller firms.

Suggested Citation

  • Ye, Yilin, 2025. "Monetary policy uncertainty, inefficient investment, and stock price crash risk," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013224
    DOI: 10.1016/j.frl.2025.108064
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    References listed on IDEAS

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