Can Analyst Coverage Reduce Stock Price Crash Risk?—Evidence from China - American Journal of Industrial and Business Management

AJIBM > Vol.8 No.4, April 2018

Can Analyst Coverage Reduce Stock Price Crash Risk?—Evidence from China ()

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DOI: 10.4236/ajibm.2018.84063 1,100 Downloads 2,812 Views Citations

Author(s)

Dongye Huang

Affiliation(s)

Department of Finance, College of Economics, Jinan University, Guangzhou, China.

ABSTRACT

Utilizing the date from 2010 to 2016 in China stock market, this paper studies the relation between analyst coverage and stock price crash risk. The result shows that security analyst coverage increases the risk of stock crash. When further dividing the analysts into star analysts and non-star analysts, the research found that the star analyst coverage can decrease stock price crash risk, and non-star analyst coverage can increase the stock price crash risk. And with the rise of star analyst ratio, the stock price crash risk will be lower.

KEYWORDS

Crash Risk, Analyst Coverage, Star Analyst

Share and Cite:

Huang, D. (2018) Can Analyst Coverage Reduce Stock Price Crash Risk?—Evidence from China. American Journal of Industrial and Business Management, 8, 912-929. doi: 10.4236/ajibm.2018.84063.

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