| Equity Pledge is the behavior that shareholders of listed companies pledge their shares to relevant financial institutions and obtain funds according to the law.In recent years,the pledge of equity by the actual controller and controlling shareholders(hereinafter referred as controlling shareholders)of listed companies has become increasingly common,due to the convenience of its financing and the lack of supervision.As of the end of March 2019,the balance of stock pledge financing was 2.5 trillion yuan,involving 3,340 stocks and accounting for 92.8 percentage of the total number of companies in the A-share market.The total amout of pledged stocks was 625.53 billion shares and the market value of pledged stocks was 5.6 trillion yuan,accounting for 9.9 percentage of the total market value of A shares.However,with the savage development of business of pledge of equity,the risk of pledge of equity exposes gradually.Especially,under the influence of downward pressure on the economy and liquidity pressure,the risk of plede of equity exposes rapidly.In practice,it is generally believed that the pledge of equity by controlling shareholders is one of the most important reasons for the stock market crash in 2018.If the risk of the pledge of the equity by controlling shareholders is not resolved timely and effectively,our stock market will further fall or even collapse and transmit the risk of the pledge of the equity into the real economy through passive change of control of listed companies by closing postion.Hence,since the second half of 2018,the risk of pledge of equity has been defined as systematic risk by the Financial Commission of the State Council.Topic meetings at which relevant ministries and local governments were required to work together to resolve the risk of pledge of the equity by controlling shareholders immediately,were hold by the Financial Commission of the State Council many times.Subsequently,to resolve the risk of the pledge of the equity by controlling shareholders,the relevant deparments of our coutry have issued a series of legal norms and the regulatory authorities have also taken a series of policy measures.At the same time,a large number of rescue funds have been set up by local governments and financial institutions.At the same time,the pledge of equity by controlling shareholders has gradually becomes the focus of academic research.Existing academic research mainly focuses on the impact of the pledge of equity by controlling shareholders on the corporate governance and the secondary market.As for the corporate governance,it mainly studies agency problems caused by the pledge of equity by controlling shareholders,such as tunneling,earnings management and market value management.As for the secondary market,it mainly studies the impact of pledge of equity by controlling shareholders on crash risk of stock price.However,from wide view of the domestic and foreign literature,there are at least the following three deficiencies.Firstly,the impact of pledge of equity on the crash risk of stock price of listed companies has not reached a consistent conlusion.Some studies show that the pledge of equity by controlling shareholders will increase the crash risk of stokc price.But other studies show that the pledge of equity by controlling shareholders will reduce the crash risk of stock price.If the causal relationship between the pledge of the equity by controlling shareholders and the crash risk of stock price is not clear,the existing policies and measures to resolve the risk of the pledge of the equity by controlling shareholders are difficult to achieve the goal of stabilizing the stock market.Secondly,the existing research mainly focuses on the motivation and economic consequences of the pledge of equity by controlling shareholders and lacks research on how to alleviate the negative impact of the pledge of equity by controlling shareholders.Thirdly,how to resolve the risk of pledge of equity by controlling shareholders is still a blank.In fact,as the world's largest transitional economy country and emerging market,Chinese special institutional background and market environment,such as the support of local government,new regulations on reduction of stock shares,the strong position of security companies and so on,provides a good experimental environment for studying the behavior of the pledge of equity by controlling shareholders.Through the research of the pledge of the equity by controlling shareholders,on the one hand,it can deepen people's understanding of the behavior of controlling shareholders,on the other hand,it can provide effective policy recommendations for regulators on how to prevent the risk of pledge of equity from evolving into systematic risk.Therefore,combined with the research blank of the pledge of equity by controlling shareholders,the article attempts to examine the pledge of equity by controlling shareholders from the following three aspects.Firstly,we are going to study the influence of the pledge of equity by controlling shareholders on the crash risk of stock price in depth.Secondly,we are going to study the current dilemma faced by listed companies to resolve the risk of pledge of equity by controlling shareholders.Thirdly,we are going to study the successful experience of listed companies in the A-share market in resolving the risk of pledge of equity by controlling shareholders.This article is divided into seven levels and seven chapters.First of all,we are going to study the historical background of the development of the business of the pledge of equity and related designed institutions.Secondly,we are going to empirically analyze the influence of the pledge of the equity by controlling shareholders on the crash risk of stock price.Thirdly,there is a series of survey analysis on the current dilemma faced by listed companies to resolve the risk of pledge of equity by controlling shareholders.Fourthly,there is a case study to successfully resolve the risk of pledge of equity by controlling shareholders.Finally,it summarizes the difficulties in resolving the risk of pledge of the equity by controlling shareholders and provides relevant policy recommendations.The structures and main content of each chapter are as follows.The first chapter is an introduction.This chapter mainly summarizes the research motivation,purpose,ideas,content and contains a literature review.The literature review summarizes four main aspects of current academic research on the pledge of the equity by the controlling shareholders.The second chapter is the current situation,risk origin and economic influences of the pledge of the equity by controlling shareholders.Firstly,it is the development history of the pledge of the equity by controlling shareholders in our countries,which contains three stages,three features and three driving factors of the pledge business.Secondly,it is the analysis of risk causes of the business of the pledge of equity.Generally speaking,the risk causes of business of pledge of equity is gradually formed by the superposition of multiple factors and the transmission of multiple risks.Thirdly,it is the risk transmission and economic influences of the pledge of the equity,which mainly refers to the negative influences of the pledge of the equity by controlling shareholders on listed companies,financial institutions and the secondary market.The third chapter is the first part of our empirical research.It studies the mechanism and intermediate path of the pledge of the equity by controlling shareholders on future crash risk of listed companies.The study finds that violation of related parts of listed companies plays a role of partial mediating effect but not a complete mediating effect in the influence of the pledge of equity by controlling shareholders on the future stock price crash risk.The fourth chapter is the second part of our empirical research.It studies the relation ship among the pledge of the equity by controlling shareholders,corporate governance and the crash risk of the stock price.Specifically,we study the impact of pledge of the equity by controlling shareholders on crash risk of stock pric of listed companies and whether two kinds of corporate governance mechanisnms,such as inquiry letters and internal control,can alleviate the above impact.The five chapter is the survey analysis of our research,which studies the realistic dilemma we must face in the process of risk resolution of the pledge of the equity by controlling shareholders.Firslyt,it is survey analysis of the related problems on bail-out fund,based on the implementation effect of rescue bail-out funds in Shenzhen.Secondly,it is survey analysis of practical difficulties faced by listed companies in resolving the risk of pledge of equity in Zhejiang,Guangdong,Fujian and Xiamen.The six chapter is a detailed case study on successful experience about Anhui Tatfook Technology Co.,Ltd resolving the risk of the pledge of the equity and provides some suggestion about asset management company(hereinafter,referred to as AMC)to resolve the risk of the peldge of the equity.The seven chapter is conclusions and policy suggestion.Firstly,it is the summary of difficulties of resovling the risk of pledge of the equity.Secondly,it is the corresponding policy suggestion,which is the foothold of the whole paper.The academic innovation and contributions of this article are mainly reflected in the following four aspects:Firstly,this paper straightens out the negative impact of the pledge of the equity on the crash risk of stock price and related inhibition mechanism.The empirical models not only verify the positive correlation between the pledge of equity and crash risk of stock price,but also verify the internal and external checks and balances are conducive to early warning and mitigation of crash risk.Secondly,this paper gets a clear picture of the actual effects and difficulties of the bail-out fund in the rescue process.At the same time,it has also figured out the pratical difficulties in the resolving the risk of the pledge of the equity by controlling shareholders of listed companies.Thirdly,this paper summarizes the valuable experience of successfully resolving the risk of the pledge of the equity by controlling shareholders.Fourth,this paper systematically summarizes the difficulties in resolving the risk of the pledge of the equity and makes targeted policy recommendations.The main shortcomings of this paper are as follows:Firstly,the scope of survey of our research is limited,so it is difficult to find out all difficulties in resolving the risk of equity pledge of controlling shareholders.Secondly,in the empirical study,it is difficult to depict some illegal behaviors that have not been investigated and dealt with by the regulatory authorities,which may lead to our empirical conclusion deviation.Thirdly,corporate governance mechanism only considers the regulatory inquiry and internal control,and lacks more comprehensive and systematic empirical research. |
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