ساختار مالکیت، کیفیت حسابرسی ساختار هیئت مدیره و خطر سقوط قیمت سهام Ownership structure, audit quality, board structure, and stock price crash risk: Evidence from China

1. Introduction Stock price crash risk has become increasingly important to regulators, academics, and investors. Research on stock price crash risk has intensified since the 2008 financial crisis. So far, most of the studies have focused on the U.S. setting, where the potential correlates investigated have included corporate governance (Andreou, Antoniou, Horton, & Louca, 2016), financial reporting quality (Francis, Hasan, & Li, 2016; Kim & Zhang, 2016), management style and compensation (Kim, Wang, & Zhang, 2016), and informal institutions, such as religion (Callen & Fang, 2015). Research in the Chinese setting is much more limited, even though the Chinese capital markets have grown to become among the largest in the world. The rapid growth of the Chinese equity markets has come with its own set of unique regulatory challenges and market volatility. Formal institutions, such as investor protection systems, corporate governance, and accounting standards are still considered to be less developed in China (Allen, Qian, & Qian, 2005), with stock markets experiencing large bubbles and crashes (Piotroski & Wong, 2012). This study investigates the relation between crash risk in Chinese-listed firms and corporate governance attributes. Specifically, we jointly consider three dimensions of governance mechanisms: ownership structure, board structure, and audit quality, which comprise 15 individual attributes. Each of these governance attributes is intended to enhance management monitoring, promote effective decision making, and constrain opportunistic behavior (Andreou et al., 2016; Ashbaugh-Skaife, Collins, & LaFond, 2006). Accordingly, we expect that the better a firm’s corporate governance is, the lower will be the information asymmetry between shareholders and management, and thus the lower the likelihood of future stock price crashes.