Research on the Impact of Deleveraging on the Risk of Stock Price Crash

Previous studies have shown that the deleveraging method of "other empowerment" is mainly to increase the amount of book capital of enterprises in the form of accounting, and does not substantially enhance the capital strength, which is a superficial "positive" but not "safe", that is, "false positive" and more "unsafe" deleveraging method. This paper uses the data of companies listed on the main board of the non-financial industry in the normal state of the A-share market from 2013 to 2018, and examines the economic consequences of using the "false positive" and more "unsafe" deleveraging method from the perspective of stock price crash risk. The results show that companies that use perpetual bonds to reduce leverage tend to have a higher risk of stock price crash, that is, the issuance of perpetual bonds and the inclusion of equity instruments will increase the risk of corporate collapse. Further research on the overall hybrid securities shows that companies that issue hybrid securities have a higher risk of stock price crash. The conclusions of this paper enrich the research on the economic consequences of deleveraging, and also broaden the research on the factors affecting the risk of stock price crash.