Asset Appraisal Bias of M&A and Stock Price Crash Risk
To Prevent and defuse major risks is a prerequisite for realizing high-quality development.In the process of marketization reform of merger and acquisition(M&A)market,asset appraisal fraud is increasingly receiving attention from all sectors in the capital market.Based on the Chinese M&A market that has developed rapidly in recent years,this paper examines whether the M&A asset appraisal bias increases the stock price crash risk,and analyzes its mechanism from the perspective of information opacity and agency problem.Using asset appraisal data from stock acquisitions by A-share listed firms in Shanghai and Shenzhen stock market during 2009-2017,we find a positive relationship between M&A asset appraisal bias and crash risk,and this relationship is weakened when the appraisal institution has a higher reputation.Mechanism analyses show that the appraisal bias increases the information asymmetry between firms and investors.Cross-sectional analyses show that the positive relationship between appraisal bias and crash risk is more pronounced with a higher separation of ownership and control,but less pronounced with a higher level of equity balancing and stronger external corporate governance.Our research enriches the literature of M&A and stock price crash risk,provides new evidences for the economic outcomes of asset appraisal bias,reminds regulators and investors to pay attention to asset appraisal quality,and provides enlightenment on preventing and defusing financial risks.
Asset appraisal biasStock price crash riskMerger and acquisitionReputationInfor-mation asymmetry
万方数据
维普
