Equity Pledging Of Shareholders,Controlling Rights Transferring Risk And Share Repurchasing

On the one hand,many studies have confirmed that when the controlling shareholder's equity pledge has a risk of liquidation,in order to maintain control,the controlling shareholder has the motive to enhance the company's stock price;on the other hand,domestic and foreign research finds that the market usually gives positive reaction to the stock repurchase event which means there is the abnormal announcement returns.Will the market effect of stock repurchase be used by the controlling shareholder who has the risk of closing the stock to raise the stock price and resolve the risk by launching the stock repurchase?This paper analyzes the motive to maintain control rights and one of the methods to maintain control rights,and then puts forward the hypothesis of control rights transferring risk:the higher the control transfer risk brought by the controlling shareholder's equity pledge,the higher the company's tendency to initiate stock repurchase.In order to verify the hypothesis of this'paper,this paper selects 32702 quarterly data from2015 to September 30,2018 as the research sample and takes the active stock repurchase in the A-share market as the research type,and uses the Logit mixed regression model to study the relationship between the control transfer risk brought by controlling shareholder's equity pledge and the stock repurchase.And the replacement of the explanatory variables,the lag phase and the replacement model are used to test the results,which proves that the conclusions of this paper are robust.The empirical conclusions of this paper are as follows:(1)The higher the equity pledge rate of the controlling shareholder and the higher the risk of the controlling shareholder's pledge stock price,the higher the company's tendency to initiate stock repurchase.The mechanism of this relationship is that the controlling shareholder has motive to take measures to raise the stock price in order to alleviate the risk of transfer of control rights.(2)In the state-owned enterprise group with less concern about the transfer of control rights,the relationship between the controlling shareholder's equity pledge and stock repurchase is no longer significant,further verifying the motivation behind the relationship.(3)The signal transmission hypothesis and the financial leverage hypothesis have certain explanatory power for the A-share stock repurchase motive.In addition,the higher the shareholding ratio of the controlling shareholder and the smaller the company's asset size,the lower the tendency to initiate stock repurchase.And the revision of the Company Law in 2018 has significantly promoted the development of China's stock repurchase business.The possible innovations in this paper have the following three points:The first is the novelty of the research perspective.The research perspective of this paper enriches the domestic research on the impact of equity pledge and the explanation of the cause of stock repurchase;the second is the subdivision of stock repurchase type.This article distinguishes between active and passive repurchase types and focuses on active stock repurchase research.Third,this article uses quarterly data covering more information to help improve the accuracy of research findings.