Can Analyst Coverage Reduce Stock Price Crash Risk?—Evidence from China

Utilizing the date from 2010 to 2016 in China stock market, this paper studies the relation between analyst coverage and stock price crash risk. The result shows that security analyst coverage increases the risk of stock crash. When further dividing the analysts into star analysts and non-star analysts, the research found that the star analyst coverage can decrease stock price crash risk, and non-star analyst coverage can increase the stock price crash risk. And with the rise of star analyst ratio, the stock price crash risk will be lower.