An Empirical Study On The Stock Pledge Of Large Shareholders And Stock Price Crash Risk

In recent years,stock pledge has become the main financing channel because of its simplicity of application procedures and low cost.For large shareholders,stock pledge is not only a kind of debt financing,but also can maintain its control rights.It can also transform the "economic stock" into "economic energy".But stock pledge is a double-edged sword for large shareholders.Once the stock price touches the liquidation line,the pledgee such as securities company has the right to force liquidation,which leads to panic selling,plunges the stock price into a vicious circle of further decline,and causes the control transfer of large shareholders and the ashes of private wealth.So what is the impact of large shareholders' stock pledge on the stock price crash risk?In view of this,we use the data of stock pledge of China's A-share listed companies from 2007 to 2017 to study the correlation between the equity pledge of major shareholders and the risk of stock price collapse.This paper finds that(1)Judging from the overall nature,there is a significant negative correlation between the equity pledge of major shareholders and the risk of stock price crash.and it is found that the higher the proportion of major shareholders' pledge,the better the risk of stock price crash can be suppressed.(2)In order to further study the benefits of controlling rights of large shareholders,this paper divides the proportion of large shareholders into two groups,and finds that the higher the proportion of pledge of large shareholders,the lower the risk of stock price collapse.(3)In the study of the impact mechanism of large shareholders' equity pledge on the risk of stock price collapse,through the status of large shareholders in corporate governance and grouping regression,we find that the negative correlation between the proportion of large shareholders' equity pledge and the risk of stock price collapse is more significant in the groups with low managerial ownership ratio and low equity balance degree,which verifies the supervisory effect of large shareholders and less tunneling effect.This paper uses the latest sample data to study the relationship between equity pledge and stock price collapse risk,enriches the research on the relationship between equity pledge and stock price collapse risk,and expands the influence of the role of large shareholders in corporate governance on stock price collapse risk.