Mobile internet usage and stock price crash risk

Abstract This article examines the impact of mobile internet usage on stock price crash risk using Chinese listed firms from 2014 to 2022. We find that a 1 GB per user increase in mobile internet usage reduces firm‐specific crash risk by 0.59%. Instrumental variable regressions and a difference‐in‐differences method exploiting 4 G rollout programs confirm causality. The effect operates through three main channels: increased investor attention, greater retail investor activism, and enhanced market liquidity. The effect is more pronounced among firms with weaker corporate governance. Overall, these findings highlight the beneficial role of mobile internet in reducing crash risk.