Public Health System Credibility and Firm-Level Financial Risk: A Panel Data Analysis.

IntroductionPublic health system credibility may influence economic behavior during health emergencies. Limited evidence examines its association with firm-level financial risk.MethodsThis longitudinal panel study uses data from non-financial A-share listed firms between 2017 and 2024. Firm-level stock return data were linked to regional measures of public health system credibility. Financial risk was measured using stock price crash risk and downside volatility. Fixed-effects regression models were estimated. Mediation analysis was conducted to examine behavioral channels.ResultsNegative public health credibility shocks were associated with higher stock price crash risk and downside volatility. Employee withdrawal and consumer demand reduction were associated with this relationship.ConclusionPublic health system credibility is associated with firm-level financial risk during health emergencies.