Dividend yield, institutional investors and stock price crash risk

Based on the listed company data of China A shares in 1999-2017, this paper systematically studies the relationship between the company's dividend yield level, dividend yield instability and stock price crash risk. We find that dividend yield will affect stock price crash risk: Paying a dividend and a higher dividend yield rate will decrease the company's stock price crash risk. We also find that dividend yield affects the stock price crash risk by influencing institutional investors' preferences. Institutional investors have both positive mediating and negative moderating effects in the relationship between the dividend yield rate and the stock price crash risk. In addition, dividend yield instability will aggravate the stock price crash risk, and the institutional investors' shareholding is one of its influence channels. The findings of this paper are helpful for the management of listed companies to make more reasonable dividend policy, and also provide empirical evidence for the regulators to make dividend guidance policy for listed companies. © 2020, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.