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The impact of COVID-19 on the crash risk of registered new shares in China

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  • Duan, Jiangjiao
  • Lin, Jingjing

Abstract

After the outbreak of COVID-19, with the stock market fluctuating and sluggish, the registration system reform of the securities issuance is steadily advanced in China. Based on this, the paper uses difference-in-differences (DID) model to investigate the impact of COVID-19 on the stock price crash risk of IPOs. By comparing registration-based and approval-based new shares, the empirical results of this paper show that due to the COVID-19 pandemic, the stock price crash risk of registered new shares has increased significantly. Moreover, with higher investor turnover rate and higher institutional shareholding ratio, the stock price crash risk of registered new shares affected by the pandemic is higher.

Suggested Citation

  • Duan, Jiangjiao & Lin, Jingjing, 2023. "The impact of COVID-19 on the crash risk of registered new shares in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23001038
    DOI: 10.1016/j.pacfin.2023.102037
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    References listed on IDEAS

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