Controlling Shareholder Pledge,Institutional Investor Holdings And Corporate R&D Investment

On March 5,2019,the government work report of the Second Session of the 13th National People's Congress put forward efforts to alleviate the problem of difficult financing for corporate financing.Since the implementation of stock pledge repurchase by the two exchanges,the number of pledges and the proportion of pledges have been rising every year.Equity pledge has become a common financing method.Under the general trend of global economic development,the importance of innovative R&D to promote the long-term development of enterprises and enhance their core competitiveness has become increasingly prominent,but the core factor for the success of R&D lies in the implementation of the main body.As the helm of the company's major business investment strategy,the controlling shareholder plays a decisive role in the R&D investment of enterprises with both risks and benefits.Under this circumstance,how to pledge the controlling shareholder's equity pledge to invest funds in R&D activities reasonably and effectively?This issue is also worthy of further study.In the case of controlling shareholder pledge,it is likely that opportunistic behavior will occur,which in turn will affect the strength of R&D investment.As an important corporate governance force,institutional investors can alleviate the agency problems of enterprises,reduce agency costs,and promote the increase of R&D investment.Therefore,on the basis of principal-agent theory,information asymmetry theory,technological innovation theory and pledge impact mechanism,this paper links theory with practice,and takes GEM listed companies as research objects to test the controlling shareholder's equity pledge and institutional investor's shareholding.The impact of corporate R&D investment,and the role of institutional investors' overall shareholding,heterogeneous institutional investors,shareholdings,and R&D investment under the controlling shareholder's equity pledge.The research questions in this paper have certain theoretical significance and practical value for the effective use of controlling shareholder pledge financing and the reasonable enhancement of enterprise R&D investment.This paper uses the combination of normative and empirical research methods,taking the data of Shenzhen Stock Exchange listed companies from 2011 to 2017 as a sample.The research finds:(1)The controlling shareholder's equity pledge is significantly negatively correlated with the company's R&D investment.(2)Institutional investors' shareholding has a significant role in promoting R&D investment.(3)The overall shareholding of institutional investors significantly eased the inhibitory effect of controlling shareholders' equity pledge on corporate R&D investment.(4)Different types of institutional investors have different adjustment roles between controlling shareholder pledge and R&D investment.Pressure-resisting institutional investors significantly alleviate the inhibitory effect of controlling shareholder pledge on corporate R&D investment,while pressure-sensitive institutions Investors have significantly increased the inhibitory effect of controlling shareholder pledge on corporate R&D investment.This paper is mainly composed of the following six parts:The first part,the introduction.The main content of this part is to introduce the background of the research and the theoretical significance and practical value of the research.It also gives a brief description of the research content and research methods,introduces the overall framework of the article,and finally summarizes the research's innovation of this paper.The second part is a literature review.This part mainly reviews and summarizes relevant literatures at home and abroad from the aspects of factors affecting R&D investment,equity pledge and R&D investment,institutional investor holdings and R&D investment,and reviews the literature on this basis.At the same time,the research direction of this paper is proposed.The third part,theoretical analysis and research hypothesis.This part defines the three concepts of R&D investment,controlling shareholder pledge and institutional investors,and clarifies the technical innovation theory,information asymmetry theory,principal-agent theory and equity pledge impact mechanism based on the research.The theoretical basis,analyze the relationship between the three,and then put forward the research hypothesis.The fourth part,research design.Firstly,the reasons for sample selection and the source of empirical data are introduced.Secondly,the evaluation criteria of independent variables,dependent variables,regulatory variables and control variables are defined.Finally,the empirical model is constructed based on the corresponding assumptions.The fifth part is an empirical analysis.This section first performs descriptive statistical analysis and correlation testing on samples.Secondly,using the empirical model designed before,the multiple regression analysis is carried out on each hypothesis,and the relationship between the controlling company's controlling shareholder pledge,the institutional investor's shareholding and the enterprise R&D investment is explored in detail based on the empirical test results.The impact of the overall shareholding of heterogeneous institutional investors and institutional investors on the relationship between controlling shareholder pledge and corporate R&D investment.Finally,a robustness test is implemented.The sixth part is the research conclusions and policy recommendations.This part mainly summarizes the conclusions of this paper based on the above empirical research,and proposes specific countermeasures and suggestions from the perspectives of equity pledge regulators,GEM listed companies and institutional investors.Finally,it is pointed out that this paper still exists.Limitations and a bright outlook for future research directions.Based on the existing research,this paper has carried out the following innovations:(1)Exploring the unique perspective of controlling shareholders' equity pledge,and exploring the influence of institutional investors on the relationship between controlling shareholders' equity pledge and corporate R&D investment.(2)Considering the influence of the characteristics of heterogeneous institutional investors,not only the impact of institutional investors on the R&D investment of the controlling shareholder's equity pledge,but also the difference in the regulatory role of heterogeneous institutional investors is explored.(3)Pay attention to the particularity of China's institutional environment,and further discuss the impact of property rights on the regulatory role of institutional investors.