Research On Financial Development,Equity Pledge And Performance Of Private Listed Companies

Since the end of the 20 th century,the economies of various countries have achieved different degrees of development.Many scholars have linked economic development with financial development and concluded from empirical tests that financial development is conducive to promoting the overall development of the domestic economy.In recent years,Chinese scholars have also studied the relationship between financial development and economic growth.From a large number of research results,the economic growth of a region and even a country has a significant positive correlation with financial development.However,the research focus of scholars focuses on the macroscopic perspective.Few scholars judge the impact of financial development on corporate performance from the perspective of micro-markets,especially for private enterprises with relatively weak marketization and relative disadvantages in market competition.Whether the promotion comes from the improvement of financial development has always been an area in which there is no clear research results in the academic world.Considering the characteristics of the development of private enterprises in China,it is not difficult to find that as a private enterprise in China,its financing channels are limited.In the absence of government endorsement and no relatively high-quality assets,private enterprises have to use the means of equity pledge to expand cash flow.source.For example,since the stock market crash in 2008,the operation mode of corporate financing with equity pledge has gradually been accepted by various private enterprises.According to the agency theory proposed by Jensen and Meckling in 1976,the equity pledge may lead to an increase in the separation speed of cash flow management rights and corporate control rights,and the equity pledge ratio is negatively correlated with company performance,but Considering that China's financial market supervision is becoming more and more strict,it is more and more difficult for listed companies to absorb funds through additional issuance of stocks and share allotments.Equity pledge has become an effective and relatively low-cost way for listed companies to obtain funds.However,this kind of operation also has a large risk,which may lead to the intensification of the contradiction between the major shareholders and the small and medium shareholders,which in turn leads to a decline in the value of the company's stocks,which is affected by the secondary market and ultimately affects the company's operating performance.In view of the above theoretical problems,this paper takes financial development as the adjustment variable,takes the equity pledge ratio of private listed companies as the explanatory variable,and takes the performance of private listed companies as the explanatory variable.Using the basic data of China's private listed companies in Shanghai and Shenzhen stocks from 2010 to 2017,descriptive statistics were carried out on the sample data,and the Pearson test was used to judge the correlation between the interpreted variables and the explanatory variables.Then construct a regression model to explore thespecific impact of financial development and equity pledge on the performance of private listed companies.Through empirical analysis,the paper obtains the following conclusions: 1.The equity pledge ratio is negatively correlated with the company's performance.The higher the equity pledge ratio,the lower the performance of the pledge company,and the equity pledge has a negative impact on the company's performance.2.With the deepening of financial development,the business performance of the company will be better reflected by the good economic environment.3.After joining the financial development adjustment variables,the company's performance is affected by the financial pledge while being affected by the equity pledge.The financial development has a regulatory effect on the relationship between the controlling shareholder's equity pledge and the performance of the private listed company.The better the financial development,the better.It can improve the adverse impact of equity pledge on the performance of private listed companies.The innovation of this paper,on the one hand,is based on more comprehensive and systematic data to sort out the development of private listed companies and the development of equity pledge in China.While grasping the impact of macro financial development,it also analyzes the impact of equity pledge on the performance of private listed companies.The conclusion has certain practical guiding significance.The shortcoming of this research is that the research on the company's long-term and short-term performance is not clearly defined,which is also the direction worth studying in the future.