Research On Influencing Factors And Economic Consequences Of Equity Pledge Of Controlling Shareholder

Due to the strong liquidity of the stock,and the controlling shareholder can control the pledged funds at his disposal,the controlling shareholder can convert the "static" assets into "dynamic" cash,under the condition of not affecting the control right,the controlling shareholder is more and more interested in the shareholding pledge.However,since 2015,our stock market has continued to fluctuate,with the price of a large number of stocks falling deeply,the phenomenon that the controlling shareholder stock pledge explodes and the final controller of listed companies change frequently appears,which has attracted extensive attention of the capital market and many scholars.It can be seen that the pledge of controlling shareholder’s equity is closely related to the ultimate controller’s own interests.In addition,our stock rights are relatively concentrated,and the phenomenon of "one controlling many" is not uncommon,which makes the role of the controlling shareholder more complicated.The pledge of stock rights may reflect the real will of the ultimate controller.Therefore,from the perspective of the ultimate controller,this paper considers the listed companies controlled by the same ultimate controller as an investment portfolio,and studies the influencing factors and economic consequences of the pledge of controlling shareholders’ equity.In this paper,listed companies in Shanghai and Shenzhen A-share markets from 2013 to 2018 are selected as samples to study the factors affecting the pledge of controlling shareholders’ equity and its impact on corporate performance from the two dimensions of concentration and relative importance of the ultimate controller’s portfolio.The research finds that :(1)the ultimate controller with high concentration of portfolio is less likely to take equity pledge;(2)within the investment portfolio,the less important company’s equity is easier to be pledged by the controlling shareholder;(3)pledge of controlling shareholder’s equity will have a negative impact on the company’s performance;(4)further research finds that internal control plays an intermediary role in the process of impairing the corporate performance by the pledge of controlling shareholder’s equity,and debt governance can reduce the damage to the corporate performance,mainly due to short-term borrowing.This study not only provides a new perspective for the study on the factors affecting the pledge of controlling shareholders’ equity,but also enriches the study on the economic consequences of pledge of equity,which is helpful to give full play to its positive role in Chinese capital market.