The Controlling Shareholder's Equity Pledge And Protection Of Minority Investors

As the equity pledge gradually shifts from the off-site to the market,the scale of equity pledge in China's capital market has expanded rapidly,and even the situation of"no stocks and no pledges" has had a profound impact on the various participants in the capital market.Equity pledge eases the financial distress of listed companies,and it also brings risks to various stakeholders.Especially in the recent capital market,"frequent explosions",The economic interests of minority investors are seriously damaged.The controlling shareholder's equity pledge stems from the shareholders' own financing constraints,but this financing method aggravates the agency conflict,making the second type of agency problem more prominent and more serious in the enterprise,thus affecting the interests protection of minority investors.The paper combines normative research and empirical research to study the controlling shareholder's pledge and the protection of minority investors in the same framework for the first time.It analyzes the controlling shareholder's pledge behavior,the proportion and the impact of pledge fund investment on the protection of minority investors,which has great theoretical and practical significance.Firstly,on the basis of reviewing the predecessors' literature,the paper combines the corresponding theoretical basis,conducts theoretical analysis,proposes three research hypotheses and establishes relevant models.Secondly,this paper is base on the GEM listed companies,because they are more difficult to raise money with less qualified qualifications,and then equity pledge occurs.We conduct descriptive statistics,correlation statistics and regression analysis of the data to test the impact of stock pledge,pledge ratio and capital investment on the protection of minority investors.Finally,summarize the empirical conclusions,propose reasonable policy recommendations and look forward to future research.The conclusions of this paper are as follows:(1)The controlling shareholder's equity pledge behavior of listed companies will have a negative impact on the protection of minority investors.(2)The proportion of equity pledge of controlling shareholders of listed companies is significantly negatively correlated with the protection of minority investors.(3)Compared with the pledge of listed companies,when the pledge funds are invested in the controlling shareholder itself or other parties,the negative effect of the controlling shareholder's equity pledge on the protection of minority investors is more significant.