Market-based reforms in share issuance and stock price crash risk: Evidence from China

This paper investigates how China's registration-based IPO reform affects incumbents' firm-specific stock price crash risk. A difference-in-differences analysis shows a significant decline in stock price crash risk, driven by disclosure competition and information spillovers that enhance transparency and external monitoring. The effects are stronger among privately owned, younger, and poorly governed firms. Departing from studies on rising stock market concentration in developed economies, this study reveals how declining concentration in China improves market stability. The findings underscore the role of IPO regulation in promoting transparency and investor protection, offering policy insights for emerging markets.