Research On Factors Influencing The Stock Pledge Of Controlling Shareholders Of Listed Companies

Equity pledge may be analogous to generally called mortgage,which means financiers can obtain funds from financial institutions by pledging their shares they holds.With the establishment of the trading platform for stock pledge in 2013,the equity pledge market has developed rapidly.Nowadays,it is common for large shareholders of listed companies to pledge their stocks,and the pledge of controlling shareholders accounts for nearly 1/3 of all the large shareholders.Moreover,some controlling shareholders even pledge all the shares they hold.There are two main reasons why they choose to pledge their shares:on the one hand,their companies are in urgent need of funds for daily operation;on the other hand,controlling shareholders themselves may have financial troubles.But a high proportion of equity pledge can lead to forced selling if there is a decline in equity value,resulting in further fluctuation of stock prices and damage to the interests of small investors.Therefore,it is of great theoretical and practical significance to study the influencing factors ofthe equity pledge of controlling shareholders of listed companies.On the basis of the equity pledge data of controlling shareholders of China's A share listed companies from 2007 to 2016,this paper first analyzes the factors affecting the controlling shareholders' pledge behavior from a theoretical perspective,and then verifies the relationship between different explanatory variables and the controlling shareholders' equity pledge rate from micro and macro point of view using empirical analysis.Finally,some policy recommendations are put forward.The results of this paper show that:the equity pledge rate of controlling shareholders is significantly related to the nature of company's actual controllers,ownership concentration,equity balance degree,the nature of the equity the largest shareholder has and the company's valuation level.Controlling shareholders are more likely to pledge equity with non-state owned enterprises,low ownership concentration degree,high equity balance degree,restricted stock,high valuation level.Controlling shareholders also tend to have higher equity pledge rate with low level of economic growth,credit expansion and the raise in stock price.This paper expands the research on the influencing factors of controlling shareholders' equity ptedge,and has a inspiration for the regulation and improvement of the equity pledge system.