The Stock Pledge Of Controlling Shareholder And The Reduction And Quit Behavior Of Blockholders

In recent years,the international economic situation has undergone profound changes.The complexity and relevance of China's financial system have also increased day by day.The contradictions and risks accumulated over the years in the economy and finance have become increasingly prominent.Preventing and resolving systemic financial risks is still an important task of our current economic work.Previous studies have shown that the stock pledge of controlling shareholders will bring risks to enterprises and the stock market.However,few empirical studies have examined the specific transmission mechanism in this process.Based on the impact of investors'behavior on stock price changes,our paper attempts to explore the first stage of the chain reaction of market risk caused by equity pledge of controlling shareholders from the perspective of shareholders' behavior.We use the quarterly data of A-share companies from 2006Q4 to 2016Q4 to empirically test the impact of equity pledge behavior of controlling shareholders on quit behavior of blockholders.We find that blockholders are more inclined to reduce their share holdings and withdraw from the list of ten shareholders with the increasing share pledge ratio of controlling shareholders.This effect is only significant in private enterprises.When blockholders and controlling shareholders are unanimous actors,or the shareholding ratio of blockholder is more than 5%,or the blockholders are senior shareholders or institutional investors,the quit behavior of blockholders is not significant.In addition,better internal and external corporate governance contributes to reduce the information asymmetry among shareholders,and weaken the quit behavior of blockholders.Finally,we find that the reduction and quit behavior of blockholders will significantly increase the risk of stock price collapse.This paper empirically examines the reflection of the second kind of principal-agent problem in stock pledge,and provides useful suggestions for supervisors or enterprises to cope with the risks.We use quarterly data to describe trading behavior of investors,and empirically test the initial link of risk transmission of equity pledge,which provides valuable evidence for further controlling the risk of equity pledge.