Research On The Effect Of Controlling Shareholders' Share Pledge On Earnings Forecast

In recent years,it is common for controlling shareholders to pledge their stocks in China's capital market.Share pledge has become one of the most important source of financial channels for controlling shareholders.Although pledge is the personal behavior of controlling shareholders,due to the the special status of controlling shareholders in the listed company,its action will be under great scrutiny.Since share pledge is closely related to the price of stock,therefore,it is the most important issue for controlling shareholders to hold back the control right when they pledge shares.Under the exiting framework of principal-agent,since the high stock equity concentration degree in China,the core corporate governance is between the controlling shareholders and the minority shareholders.Earning forecast is a forward-looking financial information disclosure which is easy to control due to uncertainty.In order to ensure the safety of control,what kind of strategy will the controlling shareholder take is a problem can be take into discussion.The research object of this paper is the controlling shareholder's equity pledge behavior and expounds the earning forecasting disclosure strategy of the controlling shareholder under different stock market crash risks.The study finds that during the period of the shareholder's equity pledge,the willingness to disclose the earning forecast is significantly improved.When the company faces a risk:of stock market crash,in order to avoid further hoarding of bad news,listed companies will release bad news,but the quality of information is not high.When the company faces the risk of stock collapse,listed companies will release good news and hide bad message.Therefore,investors should pay attention to the controlling shareholder's equity pledge status and be in vigilance when applying the earning forecast information.