Unveiling the hidden risks of government subsidy reliance: evidence from stock price crashes

doi:10.1080/02102412.2025.2455304

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	Unveiling the hidden risks of government subsidy reliance: evidence from stock price crashes
	Rehman, Obaid Ur 1; Kai, Wu 2; Xue, Jiao 1
	2025-02-01
在线发表日期	2025-02
发表期刊	SPANISH JOURNAL OF FINANCE AND ACCOUNTING-REVISTA ESPANOLA DE FINANCIACION Y CONTABILIDAD
摘要	We develop a novel index to quantify the extent to which firms' key operations - such as investment, efficiency, innovation, and liquidity - depend on government subsidies . Using data from Chinese listed firms (2007-2021), we find that a 1% increase in this index is associated with a 2.6% rise in ex-post stock price crash risk, except for subsidies in the form of tax rebates. To address endogeneity, we employ a DID approach leveraging China's anti-corruption campaignand an IV approach using proximity to subsidy offices and city-level fiscal capacity as instruments. The effect is stronger in financially constrained firms and those with lower institutional holdings. Robustness checks confirm these findings. Channel analysis identifies information disclosure quality and operational risk intensity as key mechanisms. Our results highlight hidden risks of government subsidies for stock price stability, offering practical insights for managers of subsidy-dependent firms and policymakers.
关键词	Government subsidy GSUB index information disclosure operational risk crash risk E60 G28 G33
DOI	10.1080/02102412.2025.2455304
收录类别	SSCI
ISSN	0210-2412
语种	英语
WOS研究方向	Business & Economics
WOS类目	Business, Finance
WOS记录号	WOS:001410270100001
出版者	ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
原始文献类型	Article ; Early Access
EISSN	2332-0753
引用统计	被引频次[WOS]：0 [WOS记录] [WOS相关记录]
文献类型	期刊论文
条目标识符	http://ir.lzufe.edu.cn/handle/39EH0E1M/38745
专题	兰州财经大学
通讯作者	Rehman, Obaid Ur
作者单位	1.Lanzhou Univ Finance & Econ, Sch Finance, Lanzhou, Peoples R China; 2.Cent Univ Finance & Econ, Sch Finance, Beijing, Peoples R China
第一作者单位	兰州财经大学
通讯作者单位	兰州财经大学
推荐引用方式 GB/T 7714	Rehman, Obaid Ur,Kai, Wu,Xue, Jiao. Unveiling the hidden risks of government subsidy reliance: evidence from stock price crashes[J]. SPANISH JOURNAL OF FINANCE AND ACCOUNTING-REVISTA ESPANOLA DE FINANCIACION Y CONTABILIDAD,2025.
APA	Rehman, Obaid Ur,Kai, Wu,&Xue, Jiao.(2025).Unveiling the hidden risks of government subsidy reliance: evidence from stock price crashes.SPANISH JOURNAL OF FINANCE AND ACCOUNTING-REVISTA ESPANOLA DE FINANCIACION Y CONTABILIDAD.
MLA	Rehman, Obaid Ur,et al."Unveiling the hidden risks of government subsidy reliance: evidence from stock price crashes".SPANISH JOURNAL OF FINANCE AND ACCOUNTING-REVISTA ESPANOLA DE FINANCIACION Y CONTABILIDAD (2025).