Research On The Motivation And Economic Consequences Of Controlling Shareholders' High Proportion Of Equity Pledge

In recent years,as a relatively flexible financing method,equity pledge has developed rapidly in China's capital market.The frequency of equity pledge behavior is increasing,and the proportion of equity pledge is also increasing,especially for controlling shareholders' high proportion equity pledge.As the main body of equity pledge,controlling shareholders should pay attention to the motivation and economic consequences of equity pledge.Therefore,this paper tries to explore the Motivation and corresponding economic consequences of high proportion equity pledge of controlling shareholders from the perspective of controlling shareholders.Firstly,this paper reviews the relevant literature of equity pledge at home and abroad,then analyses the situation of equity pledge of controlling shareholders of Listed Companies in China,and analyses the general situation,motivation,capital investment mode and consequences of equity pledge of controlling shareholders in China.Then,taking Huayi Brothers Company,a typical representative of controlling shareholders' high-proportion pledge of shares,as the research object of this paper,it analyses the general situation and motivation of controlling shareholders' high-proportion pledge of shares,and analyses the specific pledge capital investment and economic consequences of Huayi Brothers.By using LaPorta method,Z-score model,event study method and financial index analysis method,it pledges controlling shareholders.The economic consequences of the equity pledge behavior in which the pledged capital is invested in its own mode are analyzed to verify whether the high proportion of the controlling shareholders' equity pledge will have an impact on the degree of separation of control rights from cash flow rights,the risk of equity closing,the financial risk of the company,the performance of the company's stock price and the company's performance.The results show that controlling shareholders' investment in pledged funds will aggravate the degree of separation of control rights and cash flow rights,and the controlling shareholders' encroachment on the interests of small and medium-sized shareholders,increase the risk of liquidation and financial risk of the company,affect the stability of the company's stock price,and also affect the company's performance.Finally,this paper analyses the problems existing in Huayi Brothers' equity pledge case,and puts forward policy suggestions on internal governance and external market supervision in view of the problems existing in Huayi Brothers' equity pledge case,hoping to give some enlightenment to controlling shareholders' equity pledge behavior in China's capital market,so as to promote the healthy development of China's capital market and listed companies.Exhibition.