If you can catch me: How does regulatory technology affect stock price crash risk?

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Authors: Yingzi Ye, Changyuan Xia, Junjie Yang, Kam C. Chan
Cited by: 3
References: 60

Abstract

Purpose This study aims to examine the impact of regulatory technology on stock price crash risk by analyzing the implementation of the Intelligent Corporate Profile Regulatory (ICPR) system by the Shenzhen Stock Exchange (SZSE). Design/methodology/approach We use a multiple regression model to examine the relationship. Findings The results show that after the ICPR system is adopted, firms experience a significant decline in subsequent crash risk relative to the period before its adoption. The evidence suggests that regulatory technology can promote corporate transparency, leading to lower crash risk. Further analyses suggest that timely disclosure of bad news and increased regulatory risk are the main channels behind this effect. The effect is more pronounced among firms with weaker internal governance, indicating that external technological oversight can substitute for internal governance deficiencies. Practical implications The findings suggest that regulatory technology can promote corporate transparency, leading to lower crash risk. Originality/value Collectively, these findings underscore the role of digital regulatory tools in promoting capital market stability by alleviating resource constraints on oversight.

Fields of Study & Subjects

Auditing Earnings Management Governance Corporate Finance and Governance Financial Reporting and XBRL

Publication details

Journal / source
China Finance Review International
Publisher
Emerald
Pages
1–34
Publication date
15 January 2026
Language
EN