Research On Controlling Shareholder's Equity Pledge,Internal Control And Corporate Performance

Equity pledge has developed rapidly in China's capital market in recent years.It not only broadens the financing channels of listed companies,but also breaks the original balance between shareholders' risks and earnings.In the last few years,cases of controlling shareholder's tunneling behavior by equity pledge are on the increase.What kind of impact will equity pledge have on corporate performance?What is the role of internal control in this relationship?It is meaningful to strengthen the research on these problems.For listed companies,it can provide references to strengthen internal control construction and improve corporate performance.For regulators,it can provide suggestions to improve the construction of equity pledge related systems and regulate shareholders' pledge behavior.For investors,it can protect their interests by deepening their understanding of equity pledge.This thesis adopts the methods of normative research and empirical research.It analyzes the reasons,motivation and transmission of the impact of controlling shareholder's equity pledge.It also theoretically deduces the inhibitive effect of internal control on the behavior effect of controlling shareholder.In this thesis,A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2014 to 2018 were selected as samples for empirical research.Through descriptive statistics,correlation test and multiple regression analysis,this thesis studies the impact of controlling shareholder's equity pledge on corporate performance,and introduces corporate internal control as a moderating variable to find out its role in the impact mechanism.The results show that,the controlling shareholder's equity pledge is negatively related to corporate performance.The quality of internal control is positively related to corporate performance.The moderating effect of internal control on the correlation between controlling shareholder's equity pledge and corporate performance is significant.High-quality internal control can weaken the negative impact of controlling shareholder's equity pledge on corporate performance.Based on the above conclusions,the following suggestions are put forward in this thesis.First,improve the information disclosure system of equity pledge.Second,strengthen the construction of internal control system.Third,strengthen the constraint of corporate governance and external supervision on the controlling shareholders' pledge behavior.In this way,we can reduce the risk of equity pledge and standardize this financing method to provide reliable financial services for listed companies and capital market.