Research On The Impact Of Equity Pledge On Stock Price Crash Risk

The official launch of the pledged repo business in 2013 drove the rapid growth of the equity pledge business,and A-shares entered an era of no stocks and no pledges.According to Wind data,by the end of 2018,a total of 3019 companies had pledged their shares.The market value of equity pledge was as high as 5.63 trillion yuan,and the overall pledge rate of stock market reached more than 10%.For listed companies,especially for the controlling shareholders of private enterprises,equity pledge financing can effectively alleviate the problem of liquidity.However,in 2018,when the stock market continued to be depressed,The sharp fall in stock prices has led to a large number of listed companies' Pledged Shares touching the liquidation line,the frequent occurrence of stock pledge bursting events,a large number of Pledged Shares being forcibly sold,and the abnormal transfer of control rights of many listed companies,resulting in the vicious circle of endogenous accelerated decline of the company's share price and even the entire financial market,and the long-backlog of stock pledge business risks began to expose.So,will the controlling shareholder's equity pledge increase the risk of stock price crash? Which mediating variable is the impact of equity pledge on the risk of stock price crash transmitted?In order to solve the above problems,this paper takes GEM listed companies from 2013 to 2017 as samples to study the impact of controlling shareholders' equity pledge on the risk of stock price crash,and the intermediary effect of separation of two rights in the relationship between the two variable.Through empirical analysis,we find that controlling shareholders' equity pledge will increase the risk of stock price crash in the future,and equity pledge will also increase the degree of separation of two rights.Increasing the degree of separation of two rights will significantly increase the risk of stock price crash.By referring to the intermediary effect test procedure of Wen Zhonglin et al.(2014),this paper further verifies that the separation of two rights is between equity pledge and stock price crash risk.It plays a mediating role.Through the analysis of the empirical results,it can be concluded that after the pledge of the controlling shareholder's equity,the degree of separation of the two rights increases because the actual control right remains unchanged,while the actual cash flow right decreases due to the limitation.With the increase of the separation of the two rights,the controlling shareholder has a weakening incentive effect and a strengthening embezzlement effect,which improves the stock price crash risk of listed companies.As a result,the controlling shareholder's equity pledge increases the stock price crash risk due to the increase of the degree of separation of the two rights.Through further intermediary effect test,it is found that the separation of the two rights plays a part of intermediary effect in the relationship between the controlling shareholder's equity pledge and the stock price crash risk of listed companies.Research on this paper not only enriches the research on the impact of equity pledge actor-controlling shareholder on the risk of stock price crash,but also studies the intermediary effect of the separation of two rights on the relationship between equity pledge and the risk of stock price crash for the first time.