Broadband infrastructure and stock price crash risk: Evidence from a quasi-natural experiment

This study investigates the impact of broadband infrastructure development on local firms’ stock price crash risk, using the Broadband China strategic implementation plan (BCS) as a quasi-natural experiment. We show that the BCS constrains management's negative news withholding by mitigating information asymmetry between investors and firms, thereby reducing stock price crash risk. The BCS's impact on crash risk is more pronounced in highly monopolized industries and regions with lower marketization levels. The positive effect of the BCS is also more evident among non-state-owned enterprises and firms with fewer political ties, greater financial constraints, lower institutional ownership, and management possessing financial and academic expertise. Overall, our findings offer new insights into the benefits of broadband infrastructure development for stock market stability and enhancement, supporting continued promotion of national broadband infrastructure development.