Research On The Impact Of Equity Pledge On Over-investment Of Listed Companies

In recent years,the scale of equity pledge of listed companies has gradually increased.According to Wind statistics,from January 2015 to November 2018,the number of equity pledge of A-share listed companies increased for 45 consecutive months.The number of equity pledge increased from 216.04 billion stocks at the end of January 2015 to 640.65 billion stocks at the end of November 2018.The total growth rate was 196.55%.Almost no stocks in the A-share market have been pledge.At the same time,the academic community has also conducted a lot of research on equity pledge.From existing research,it mainly focuses on economic consequences of controlling shareholder's equity pledge.Due to the risk of transfer of control after controlling shareholders pledging their equity,controlling shareholders will take measures such as market value management,earnings management and information disclosure to stabilize stock price in order to avoid this risk.However,existing literatures ignore the research of whether controlling shareholders stabilize stock price by affecting relevant decisions of the listed company.The three research themes in corporate finance are financing decisions,investment decisions and distribution decisions.Therefore based on financing decisions,will controlling shareholders keep financing decisions running well by affecting investment decisions of listed companies?From this perspective,this paper studies the economic consequences of equity pledge.This paper takes listed companies of A-shares with equity pledge and over-investment from 2005 to 2017 as a research sample and analyzes the impact of equity pledge characteristics on over-investment of listed companies,and separately adds the company type and the policy effect to further study.This paper has 5 chapters.Chapter 1 is the research background,research significance,domestic and foreign literatures review,and proposing topics and innovations of this paper.Chapter 2 is the institutional background and theoretical analysis.Chapter 3 presents research hypotheses based on theoretical basis,introducing data sources and definitions of related variables.Chapter 4 is the empirical test process and results.The study finds that the equity pledge ratio has a positive impact on the over-investment of listed companies,and the controlling shareholder equity pledge has a positive impact on the over-investment of listed companies.In state-owned enterprises,the positive impact of equity pledge characteristics on over-investment of listed companies will be weakened.Under the influence of the policy effect,the positive impact of equity pledge characteristics on over-investment of listed companies will be weakened.Chapter 5 is conclusions and policy recommendations.The innovations in this paper are reflected in the following two aspects,perspective innovation and variable innovation.Existing literatures rarely study economic consequences of equity pledge from the perspective of investment decision-making.This paper makes an innovative study from the over-investment,based on the special institutional environment of China,to further research the impact of equity pledge characteristics on over-investment from the perspective of the company type and the policy effect.This paper expands the research perspective of equity pledge and further enriches the research content of the framework of "equity pledge-corporate investment".In the empirical model,the "BullBear" control variable is added according to the trend of the Shanghai Stock Exchange Index.This can remove the impact of the overall rise or fall of the A-share market on the shareholder's rising stock price effect,so that the empirical model can better reflect the impact of equity pledge characteristics on over-investment of listed companies.