The Influence Of Controlling Shareholder's Equity Pledge On The Enterprise's Operating Results Under Financing Constraints

Equity pledge as a normal financing behavior,gradually wins the favor of many shareholders of listed companies for its simple operation,risk controlled,and good liquidity.Especially in 2018 continued downward economic pressure?banks' lending shrinks and the market financing channel increasingly narrows,in that case equity pledge seems to become the best choice to solve the problem of financing.At the same time,hot events in China's capital market are endless: "shell sale on 1 yuan ","state-owned assets queuing up for takeover","chairman's intensive resignation","frequent equity freeze"...Behind this series of events,we can always see the existence of equity pledge.After frequent thunder incident,the market was abuzz with abuse,and the equity pledge systems received comprehensive and thorough denial.So,we want to know if the equity pledge really useless,just become the means of tunneling of major shareholder? Or it played an active role in his history? The question is what we need to discuss in this paper,we are trying to provide a new perspective for us to evaluate equity pledge correctly.In the past,scholars have studied the influence of equity pledge on the operating results of enterprises based on different theory,and come to different conclusions.So far,over one hundred controlling shareholders have pledged all of its share,the controlling shareholders raise funds through equity pledge which has become a widely used way of financing,but controlling shareholder equity pledge will really achieve system designed results to ease the enterprise financing constraints,and ultimately improve the company's operating results? If we just select certain variables: equity pledge,financing constraints,investment efficiency and operating results for simple regression,the influence mechanism and path may be ignored,which would make the study more ambiguous and misleading.Therefore,this paper breaks through the linear thinking of only taking the pledge of controlling shareholders' equity as the explanatory variable and the business results of enterprises as the explained variable in previous studies,our paper explore whether financing constraints and investment efficiency play a role as the mediating variables in the influence mechanism of the pledge of controlling shareholders' equity on the company's business results.This paper selected the panel data of 370 listed companies from 2013 to 2017 as the research sample,then used the residual model to obtain the investment efficiency of enterprises,and conducted an empirical study on the hypothesis proposed in this paper after adding some appropriate control variable.The conclusions are as follows:(1)there is a significant positive correlation between the pledge of the controlling shareholder's equity and the company's operating results.Even after controlling some variables and further controlling the industry and annual variables,the regression relationship is still significant.That is,the pledge of the controlling shareholder's equity is beneficial to the improvement of the company's operating results.The robustness test also supported this conclusion.(2)the results of bootstrap mediating effect test showed that two variables,financing constraint and investment efficiency,had significant mediating effects on the relation between equity pledge and company operating results.Equity pledge improves the operating results of enterprises by alleviating the financing constraints faced by enterprises and improving the investment efficiency of enterprises.