Financial services agreements, controlling shareholders' fund management and stock price crash risk
利用中国金融服务协议这一独特场景，研究发现控股股东参与资金管理与股价崩盘风险呈U型关系：低于合同限额时降低风险，超过则显著增加风险，且该效应在代理问题严重、外部监督弱的企业中更强。
Purpose The role of controlling shareholders in corporate governance has always been an important and classic topic in theoretical research, yet no consensus has been reached. Divergent findings on the governance role of controlling shareholders may largely stem from variations in research settings. Design/methodology/approach This study examines how controlling shareholders' involvement in fund management affects corporate stock price crash risk, using a unique setting of financial services agreements (FSAs) in China. Findings We find a robust U-shaped relationship between related deposits and stock price crash risk. When deposits remain below the contractual limit, controlling shareholder involvement significantly reduces crash risk, whereas exceeding the limit leads to a pronounced increase in crash risk. These effects are stronger in firms facing more severe classical agency problems and weaker external monitoring. Mechanism analyses show that below-limit deposits are associated with lower Type I and Type II agency costs, improved investment efficiency, and reduced bad-news hoarding, while above-limit deposits exacerbate Type II agency conflicts, reduce efficiency, and deteriorate the external information environment. Originality/value Overall, our findings highlight the conditional governance role of controlling shareholders and provide new evidence on how internal capital markets shape stock price crash risk in emerging markets.