An Empirical Study On Equity Pledge Of Controlling Shareholders And Corporate Performance

With the overwhelming phenomenon of stock pledge in our A share market,the pledge behavior of the dominant shareholders has a great impact on the capital market,listed companics and investors.Equity pledge widens financing channels,and also changes risks and benefits of the shareholder.What's more,it may become means of hollowing out the assets of the listed company,which has become a very unstable factor in the capital market.At present,the research on equity pledge is not enough in academic circles,and most of them are based on normative research.Combining with equity concentration,the paper adopts empirical research methods to explore the influence mechanism of controlling shareholders' pledge behavior on company performance,which has strong theoretical and practical significance.First of all,based on the latest data,we analyze the stock pledge status quo quantitatively and qualitatively,including the system development,scale,industry distribution,deadlines and common capital operations.Secondly,with reference to relevant literature research,we conduct theoretical analysis and put forward research hypotheses,considering about the motivation of pledge,the direction of capital investment,the cost-benefit,and the mechanism of regulatory effects.Thirdly,the empirical study adopts qualitative analysis,such as group analysis,independent sample T test,and regression analysis,which mainly discusses the influence of ownership concentration,equity pledge and their joint effects on company performance.Finally,based on the findings of this study,we propose relevant recommendations and future research directions.The main empirical findings are the following:(1)there is "inverted U" relationship between the controlling shareholders' pledge and the company's performance.That is,compared to lower and higher levels of pledge,the equity pledge in a moderate level will bring the greatest synergy effect on the company's performance.(2)There is significant positive correlation between ownership concentration and performance.Namely,this research supports the synergy effect is greater than the expropriation effect.(3)The ownership concentation has a signifficant regulation effect on the controlling shareholder's pledge and company performance.Specifically,when equity pledge is at a low level,the increase in equity concentration can enhance the positive effect of the pledge of controlling shareholders on company performance.And also,when equity pledge is at a high level,the increase in the equity concentration can weaken the negative effect on the company's performance due to the pledge of controlling shareholders.There is a best combination of equity pledge and equity concentration,which maximizes the synergy effect on the company.About the innovations of the paper,on the one hand,we combs the development of equity pledges,basing on a more comprehensive and systematic data,one the other hand,we considers the joint mechanism of third-party factors,which enhance the adaptability of conclusions.The inadequacy of the study is that there is no clear definition of the company's long and short-term performance and the optimal equity pledge ratio,which is also an important direction for future research.