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Latent cultural forces: Communist heritage and stock price crash risk in China

Author

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  • Yan, Youliang
  • Feng, Qingyi
  • Hu, Lin
  • Jin, Ying

Abstract

This study investigates whether and how Partisan culture, namely Communist heritage, affects corporate stock price crash risk in China's capital market. Based on the data of A-share listed companies from 2012 to 2023, we find that Communist culture is negatively associated with corporate stock price crash risk. Mechanism tests indicate that as a recessive power, Communist culture is conducive to improving information disclosure transparency, strengthening altruistic orientation, tightening disciplinary compliance, and thus mitigates corporate stock price crash risk. Moreover, this effect of Communist culture is more pronounced for firms located in regions with immature legal system, lower openness levels, and those with weaker political connections. Our findings contribute to the literature on stock price crash risk, and provides innovative insights into how Partisan culture shapes capital market outcomes in emerging markets.

Suggested Citation

  • Yan, Youliang & Feng, Qingyi & Hu, Lin & Jin, Ying, 2026. "Latent cultural forces: Communist heritage and stock price crash risk in China," Pacific-Basin Finance Journal, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:pacfin:v:98:y:2026:i:c:s0927538x26001228
    DOI: 10.1016/j.pacfin.2026.103176
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