Journal
FINANCE RESEARCH LETTERS
Volume 33, Issue -, Pages -Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/j.frl.2019.05.018
Keywords
Short-term debt for long-term investment; Crash risk; China's stock market
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Funding
- National Natural Science Foundation of China [71671122]
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The purpose of this paper is to investigate the impact of raising short-term debt for long-term investment (SDFLI) on stock price crash risk. Using data from China's stock market, this paper provides insights not only on the consequences of SDFLI but also the underlying channels through which SDFLI affects crash risk. Evidence shows that SDFLI leads to less information disclosure, higher information risk, and lower information transparency, which eventually exacerbates future crash risk. Moreover, the effect of SDFLI on crash risk is affected by firm characteristics, monitoring mechanisms, and economic environment.
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