Depoliticization and Stock Price Crash Risk: Evidence from China.

Using the enactment of Document No. 18 as a quasi-natural event, we take a sample of Chinese A-share listed companies from 2010 to 2017 to test the impact of depoliticization on stock price crash risk based on the difference-in-differences (DID) model. Our results show that depoliticization reduces future stock price crash risk more significantly among non-state-owned enterprises. Furthermore, depoliticization can mitigate stock price crash risk through the effects of financing needs, censorship risk and agency cost. [ABSTRACT FROM AUTHOR]