Does a national industrial policy promote financial market stability? A study based on stock price crash risk

• DOI: 10.1016/j.cjar.2022.100269
• Publication Date: 2022-10-17T11:06:40Z
• Authors: Weimin Xie; Hengxin Zhang; Jialu Guo; Miao He
• Keywords: Stock market crash

Whether the implementation of a national industrial policy can maintain stability in financial market is question theoretical and practical significance. Using data from China's non-financial listed firms 2007 to 2020, we find that lowers stock price crash risk. We effect an on lowering risk more pronounced regions with low levels regional marketization if have high external uncertainty, total asset turnover, greater earnings management receive small increments long-term loans fewer government subsidies, suggesting policies lower by improving firm fundamentals reducing agency costs information asymmetry.