Study On The Impact Of The Controlling Shareholders' Stock Pledge On The Coporation Value In Private-Owned Listed Companies

Ownership structure is one of the most important problems in corporate governance. That controlling shareholders exist in listed companies in all over the word makes the focus on the agency promblem between the controlling shareholders and the smaller shareholders in corporate governace. In the circumstance of lacking the protection for the investors, such problems will be more serious.Recently, with the rapid development of capital market in China, more and more listed companies pledge their stocks which arouse the attention from all society. On the one hand, pledging stocks entitle the facilities for satisfing the need for finance. On the other hand, controlling shareholders might disguise their aim to get private intrests from the listed companies by pledge. Thus, it has strong realistic meaning to analyze the negtive effects of pledging by controlling stockholders in the economic angle.Using the datas of private-owned listed companies in China, this paper study the ownship structure and the impact on the corperation value after stock pledge. The research suggests that the ultimate controlling shareholdes in private-owned listed companies perform the incentive effect and entrenchment effect respectively and pledging the stocks will damage the corperation value by weakeng the incentive effect and strengthen the entrenchment effect. Though both normative and empirical analysis, the paper discusses the impacts on the corporate value by stocks pledge. After a thorough review of existing literatures, the thesis describes the situation and the charactors of pledging stocks by controlling shareholders in listed companies as well as the motivation to pledging. Moreover, as the basic of empirical analysis, we reveal varied risk which pledging stocks bring to the private-owned listed companies through the cases study. Then, using the data of private-owned listed companies from 2006 to 2009 and taking Chinese actual conditions into account, we develops a model to explain the relationships between stocks pledge and corporate value.Compared with similar research, the innovation of this dissertation lies in two aspects: systemetically researching the stock pledge in an economic angle; taking deep study on the pledging by private-owned listed companies with latest data which make the result more ralative.Based on the results of empirical research, the thesis put forward some governance suggestions on preventing and controlling the risk brought by stocks pledge and improving governance mechanism. Meanwhile, it will be helpful for the stock market supervision, pledgees such as banks and public investors' decision.