This article studies the investment efficiency and stock price crash risk of listed companies under the background of technical sanctions and their interrelationships. Firstly, using the quasi-natural experimental rules from empirical research, I conduct a DID model to verify whether technical sanctions have an impact on investment efficiency and stock price crash risk. Secondly, further in-depth analysis of the mechanism of the impact of technical sanctions on the risk of stock price crash is a major innovation of this article, adding new empirical evidence of the impact of technical sanctions. This article uses a validated and mature DID model to study the impact of technical sanctions on A-share listed companies, which is a concern for both industry practitioners and academic researchers. The research finds: (1) the investment inefficiency of listed companies has increased after being sanctioned, and this relationship is significant at the 10% level. The Chinese economy has achieved rapid growth in the past few years, primarily driven by investment. Listed companies in the Chinese stock market are leading companies in various industries in China. This indicates that although increasing investment can alleviate the adverse effects of sanctions on enterprises, many investments are not efficient, which can have a negative effect on investment efficiency; (2) After the company was sanctioned, the crash risk of stock price increase, but the correlation coefficient was not significant, so this impact was not statistically significant; (3) the lower the investment efficiency, the greater the risk of crash, but this relationship is not statistically significant. Technical sanctions negatively weaken the relationship between investment efficiency and stock price crash risk, that is, after a company is subject to technical sanctions, the impact of investment efficiency on stock price crash risk becomes weaker. The weakening of this relationship stems from two potential aspects: firstly, the impact of technical sanctions on investment efficiency, which has been partially verified before. Secondly, technical sanctions can also have an impact on the risk of stock price crash. In previous studies, it was found that technical sanctions increase the risk of price crash, but this relationship is not very significant. Therefore, comprehensive analysis shows that technical sanctions weaken the impact of investment inefficiency on the risk of stock price crash, and the mechanism is that the investment inefficiency of listed companies increases after technical sanctions and absorbs some of the impacts on the risk of stock price crash, thus reflecting the reduction of the impact of investment inefficiency on the risk of stock price crash. However, this relationship still lacks sufficient statistical support.

At the same time, this article also studied the impact of technical sanctions on stock prices in the short term based on event study methods, and found that the impact of technical sanctions on stock prices in the short term is very significant. Overall, the abnormal returns calculated in this article are very significant within the [T-30, T+30] time interval. However, by delving into the composition of abnormal returns, it was found that abnormal returns are only significant in a few industries and not significant in most other industries. Secondly, in the four years 2019 to 2022, during the [T, T+5] time period [...]