The Impact Of Equity Pledge Of Controlling Shareholders On The Risk Of Stock Price Collapse Of Listed Companies

In recent years,equity pledge has become the financing choice of more and more controlling shareholders of listed companies.The number of listed companies with pledge of controlling shareholder equity and the scale of equity pledge are constantly expanding.As an emerging financing tool,equity pledge is becoming more and more common in China's capital market.The equity pledge itself has many advantages such as simple operation and strong circulation,which alleviates the financing constraints of most listed companies,but it also hides huge risks.For debtors,the value of pledged goods is closely related to stock price fluctuations.When the stock price falls to the cordon,the controlling shareholders must add additional guarantees.Once the stock price falls to the balance line and the debtors cannot provide the guarantees in time,the pledgee has the right to close the pledged stock forcibly in the secondary market.The controlling shareholders will face huge losses of personal wealth and even the risk of transfer of control.Therefore,after the equity pledge,the controlling shareholders have a strong incentive to reduce the risk of stock price collapse.Then,how does the controlling shareholders' equity pledge affect the listed company's share price collapse risk?This issue requires us to conduct in-depth research.Based on some equity pledge related theories such as information asymmetry theory,signal transmission theory and contract theory,this thesis takes the A-share listed companies in Shenzhen and Shanghai from 2010 to 2017 as samples,and draws on Chen et al.(2001)and Roychowdhury(2006)to calculate three main indicators including controlling shareholder pledge,real earnings management and stock price collapse risk.After adding the corresponding control variables,this thesis conducts an empirical test on the above problems by constructing a multiple linear regression model.This thesis draws the following conclusions:(1)After the controlling shareholders conduct the equity pledge,the listed company's share price collapse risk will be significantly reduced;(2)After the controlling shareholders conduct the equity pledge,the real earnings management level of the listed company increased significantly,and the controlling shareholders tend to use the real earnings management to reduce the risk of stock price collapse;(3)The impact of controlling shareholders' equity pledge on the stock price collapse risk will be affected by the property rights of listed companies.In contrast,the negative correlation between the equity pledge of controlling shareholders of non-state-controlled listed companies and the risk of stock price collapse is stronger.Finally,this thesis proposes some policy recommendations from the perspective of regulators,listed companies and pledgee:improving the financial information disclosure mechanism of listed companies,improving the mechanism of equity pledge information disclosure and strengthening the internal governance and external supervision mechanism of the company.