How Does Debt Structure Influence Stock Price Crash Risk?

  • Zichao Jia
  • , Lu Deng*
  • , Ruiyang Xu
  • *Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper uses the financial data of Chinese listed firms to explore the relationship between the debt structure, which is measured as the ratio of trade credit to bank loan, and future stock price crash risk. The empirical results show that the ratio of trade credit to bank loan is positively associated with the firm-specific crash risk while a good institutional environment reduces this positive relationship. In addition, considering the firm’s ownership type, the authors find that the positive relationship between the debt structure and crash risk is more significant in the SOEs.

Original languageEnglish
Pages (from-to)473-492
Number of pages20
JournalJournal of Systems Science and Complexity
Volume31
Issue number2
DOIs
StatePublished - 1 Apr 2018

Keywords

  • Bank loan
  • crash risk
  • debt structure
  • trade credit

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