Does Controlling Shareholder's Share Pledge Affect The Firm's Decision On Large Stock Dividends?

“The large stock dividends” refers to the fact that a listed company uses a large proportion of retained earnings to send shares or use a large proportion of capital reserve to increase stocks.This is a numerical adjustment within the owner's equity of listed companies,and does not provide investors with any additional returns,but It can always bring significant positive market effects and rapidly increase the company's stock price.The large stock dividends is highly welcomed by the capital market,so it is often used by some listed companies to attract investors as well as to achieve their own interests,such as helping internal stakeholders to sell stocks or helping private investors to retreat.As an emerging financing method,share pledge is more and more popular among the controlling shareholders of listed companies.The economic problems that may be brought about by them are more and more valued by scholars.Some papers have found that controlling shareholders with share pledge will enhance their share price through expedient measures such as earnings management and information disclosure manipulation,so as to ensure the security of their pledged shares.So,will the company use the large stock dividends to help controlling shareholders with share pledge reduce the risk? Based on this problem,we adopted the perspective of controlling shareholder's share pledge to reveal the motivation behind the large stock dividends.After controlling the two kinds of interest motives,this paper studied the influence of the controlling shareholder's share pledge on the large stock dividends.In this paper,we selected A-share listed companies from 2005 to 2015 as the research object,and selected 34,828 observations.We used logit model to study the influence of the controlling shareholder's share pledge on the large stock dividends.The results show that after controlling the other self-interest motivations of the controlling shareholders,listed companies tend to be more likely to make large stock dividends decisions if the controlling shareholders have share pledge.Second,the more the number of share pledge the controlling shareholders have,the more likely the listed company would to make large stock dividends.Further research indicates that under the same situation of the share pledge,the company with a falling stock price would more likely to launch large stock dividends.This paper further explains the motivation behind the large stock dividends,and provides the empirical evidence for regulators' latest decisions which strengthened the supervision and the inquiry of the large stock dividends.