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Investor-company interactions and stock price crash risk: Evidence from China

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  • Ruan, Lei
  • Yang, Liwen

Abstract

Against the backdrop of the current complex and volatile global financial environment, enhancing financial market transparency is crucial for mitigating financial risks. With the continuous advancement of Internet technology, the interactive platforms between investors and enterprises have increasingly become essential channels for information exchange in the capital market. These platforms contribute to improving information transparency, thereby effectively preventing and controlling financial risks. This paper investigates the effect of investor-company interactions on stock price crash risk, using data from Chinese A-share listed companies from 2010 to 2022. The empirical findings demonstrate that investor-company interactions significantly reduce firms' stock price crash risk, and this conclusion remains valid after a series of robustness tests. Mechanism analysis indicates that investor-company interactions alleviate information asymmetry and reduce investor disagreement, which in turn lowers a firm's stock price crash risk. The heterogeneity analysis further reveals that the mitigating effect of investor-company interactions on stock price crash risk is more pronounced for firms with high response quality, weak internal control, dispersed ownership, low media attention, low analyst attention, and poor audit quality.

Suggested Citation

  • Ruan, Lei & Yang, Liwen, 2025. "Investor-company interactions and stock price crash risk: Evidence from China," Research in International Business and Finance, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:riibaf:v:76:y:2025:i:c:s0275531925000868
    DOI: 10.1016/j.ribaf.2025.102830
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