Pledge Of Share Rights Of Major Shareholders And Risk Of Stock Price Crash

In recent years,as an effective financial strategy,equity pledge has been favored by major shareholders and has become a new financing means for major shareholders of listed companies.However,the equity pledge brings the convenience of financing,it brings risks at the same time.When the stock price of the company declines after the equity pledge,on the one hand,the major shareholder may need additional guarantees,and even face the risk of being forced to liquidate and lose control of the company;on the other hand,frequent equity pledge may have a negative impact on the company's value and performance,and even further increase the risk of stock price crash.Then,will the major shareholder focus on excluding the risks brought by the equity pledge?This paper takes the data of A-share market listed companies from 2003 to 2016 as a research sample,and examines the impact of major shareholders'equity pledge on the stock price collapse risk.The study found that:the company with large shareholder equity pledge at the end of the year has a lower risk of stock price crash;the company without state-owned shares has a lower risk of future share price crash.After using the PSM method to test the robustness of the results,the main conclusions are still approximately established.Therefore,this paper believes that after the equity pledge,the maim stakeholders will focus on reducing the risk of the company's share price crash.The research in this paper provides an important perspective for investors to understand the behavior and motives of major shareholders after equity pledge.After the equity pledge,the major shareholders tend to actively reduce the risk of stock price collapse,but the result is likely to be reached by earnings management,information disclosure management,etc.When the equity pledge expires,the risk of stock price collapse may rise again.At the same time,the research of this paper also has important theoretical and practical significance for market managers to prevent market risks and promote the stable development of the stock market.