Legal Environment,Controlling Shareholder's Equity Pledge And R&D Investment Of China's GEM Companies

In recent years,the controlling shareholder's equity pledge has become more and more common in China's listed companies,and the risks brought by regulators and investors have paid close attention to.Pledge equity is an important signal that shareholders face financing gap and have strong financing constraints.Under the circumstance that the listed companies generally have the agency costs of large shareholders and minority shareholders,it is easy to exacerbate such agency problems and affect the financial decision-making behavior of listed companies.In the process,as the development of the company is extremely important and need a lot of money to continue investment in R & D activities,whether it will be adversely affected,become the focus of this study.The listed company is a public company,and the behavior decision of the listed company should aim at the maximization of the company value,not just the interests of the big shareholders.Therefore,since the modern corporate governance is the main goal of all countries through the establishment of internal and external governance system,not only solve the agency problem between management and shareholders,but also to ease the conflict in large and small shareholders.China's listed companies have been "one single large shareholder" phenomenon,the establishment of the internal governance system will take some time to complete,so it is particularly important to external legal supervision.As early as 2002,the Commission issued the "corporate governance guidelines" in chapter second,the controlling shareholders and the listed company part specification is the behavior of controlling shareholders and the listed company,and strive to achieve isolation of controlling shareholder's behavior and listed companies.Pistor et al.(2000)found that the implementation of the law was more important than the law in thecountries with economies in transition.Although the legal provisions enacted nationwide implementation in China in all areas,but the implementation and effect of the same legal terms in each region is different,this is due to the level of legal development among regions in China is uneven.We are using this feature,investigates the impact of China's different provincial legal environment difference of corporate R& D investment,improve the environment and the rule of law can weaken the adverse effect of controlling shareholder equity pledge of R& D investment of listed companies.By analyzing the financial impact of the controlling shareholder equity pledge and listed companies respectively ? Legal environmental with the agency cost of enterprises and enterprises in terms of R & D investment literature,determine the theme of this paper to study the controlling shareholder equity pledge and GEM listed company R & D investment relationship and legal environment in the process of.Based on introducing the theory of agency cost and equity pledge system,legal environment,the controlling shareholder equity pledge to control the transfer of risk as the breakthrough point,analyzes the controlling shareholders interests of listed companies affect the influence mechanism of corporate R &D investment,put forward controlling shareholder equity pledge of hypothesis of enterprise R &D investment.Based on the analysis of the improvement of the rule of law environment and the reduction of the cost of enterprise agents,the research hypothesis that the improvement of the rule of law environment can promote the R &D investment of enterprises is put forward.At the same time in the analysis of legal environment can improve the supervision of controlling shareholders' entrenchment function basis,put forward the improvement of the legal environment can inhibit the controlling shareholder equity pledge hypothesis of listed companies adversely affect R &D investment.In the empirical part,we select 1044 annual data of 348 listed companies of China's GEM listed companies in 2013-2015 years.Based on the hypothesis,the regression model was established and regression analysis was carried out.The article draws a conclusion:(1)thecontrolling shareholder equity pledge into a significant negative correlation with development of GEM companies in China;(2)improve the legal environment conducive to promoting the development of China's GEM listed companies investment;(3)improve the legal environment can inhibit the adverse effects of the controlling shareholder equity pledge to our country listed on gem the company has R &D investment.In this paper based on the conclusions of the study,put forward to limit the controlling shareholders of listed companies equity pledge proportion of controlling shareholder equity pledge pledge proportion according to the classification regulation and disclosure,inhibit the negative effect on controlling shareholder equity pledge of R &D investment company,to promote the innovation and development of the company.At the same time to promote the system construction of China's laws and regulations,focus on the implementation of security laws and regulations,improve the level of the rule of law,the establishment of good corporate governance structure,safeguard the overall interests of the company,to protect the interests of small investors,and promote the healthy operation of the capital market.