Stock Pledge,Earnings Management And Corporate Bail-out Financing Priorities

In recent years,the controlling shareholders of Chinese listed companies have generally raised funds through stock pledge transactions.As of December 31,2018,the stock pledge participation of listed companies in China's A-share market has reached 96%.Due to credit contraction,Sino-US trade frictions,and increasing stock market regulation,China's stock market has been falling,and many companies are at risk of closing stock pledges.In order to alleviate the company's stock pledge risk,avoid systemic risks and promote the overall macroeconomic stabilization,the China Securities Regulatory Commission and local governments have implemented bail-out financing for listed companies facing stock pledge risks to solve the liquidity difficulties of these companies.However,under the constraints of the relatively limited amount of bailout funds and the uneven operating conditions of enterprises on the financing demand side,it is necessary and significant to identify the enterprises to be rescued and provide priority bailout financing services to high-quality enterprises,so as to optimize the allocation of resources of bailout funds.Compared with other industries,China's healthcare industry stock pledge risk is relatively large,so this article chooses to take the healthcare industry as an example to carry out related research and analysis.This paper uses the relevant data of listed companies in China's healthcare industry from 2014 to 2017,and uses the entropy method to obtain the comprehensive index Z of the enterprise.It is considered that the larger the Z value,the better the performance of the company's fundamentals.Therefore,it is preferred to provide bailout financing for enterprises with high Z value.In addition,through empirical analysis,this paper finds that companies in China's healthcare industry that have controlling shareholder pledge tend to manage their earnings through development expenditure capitalization,and thus have potential moral hazard problems.Therefore,this paper points out that the financing of enterprises should be screened and queuing,not only paying attention to the fundamental situation of enterprises,but also paying special attention to the issue of considering corporate moral hazard,that is,only considering the fundamentals and moral hazard of the enterprise.Enterprises with financing difficulties are selected and queued,and enterprises with better performance in both areas are given priority to provide bail-out financing services,so that the allocation of financing resources for bail-outs is optimal.