The Impact of Cash Holding on Stock Price Crash Risk
- 10.2991/assehr.k.211209.252How to use a DOI?
- cash holding; stock price crash risk; operating cash flow; agency theory
This paper develops a fixed-effect model to examine the effect of cash holding on stock price crash risk with data of Chinese listed firms from 2007 to 2018. The results indicate that corporate cash holding is positively related to stock price crash risk. Based on this consequence, it is proved that the positive relationship between operating cash flow and stock price crash risk is more pronounced. In addition, the nature of the state-owned property and “big four” auditors can strengthen the relationship of the cash holding and crash risk. This paper validates the negative effects of agency problems, confirming that the interest conflicts between stockholders and executives do increase the crash risk. It also provides a reference for investors to judge the investment risk of a firm. Moreover, it provides a new way for regulatory authorities to supervise the risk of enterprises and therefore maintain the stability of the market.
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Zhuxin Chen PY - 2021 DA - 2021/12/15 TI - The Impact of Cash Holding on Stock Price Crash Risk BT - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021) PB - Atlantis Press SP - 1551 EP - 1562 SN - 2352-5428 UR - https://doi.org/10.2991/assehr.k.211209.252 DO - 10.2991/assehr.k.211209.252 ID - Chen2021 ER -