Research On The Equity Pledge Of Major Shareholders,Risk-taking Ability And Enterprise Value

Equity pledge is a financing method that Chinese listed companies are keen to adopt.A large number of studies show that the pledge of major shareholders'equity increases the separation of their control rights and cash flow rights,which makes major shareholders make opportunistic behaviors for their own interests.So it has a negative impact on the value of the enterprise and is not conducive to the development of the enterprise.However,some researchers believe that the introduction of pledge of stock rights to the pledgee strengthens the external supervision of enterprises.At the same time,the enterprise can alleviate the pressure of cash flow through equity pledge,which can promote the enterprise value.Thus,in reality,how does the pledge of major shareholders' equity affect the enterprise value?Is the impact of equity pledge on corporate value different in different situations?Will the impact of the pledge of large shareholder's equity on the enterprise value change with the different risk-taking ability of the enterprise?These problems need further analysis and test.Based on the data of A-share listed companies in 2014-2018,this paper reveals the impact of equity pledge on the value of the company in different situations.At the same time,the risk-taking ability of enterprises is introduced as a regulating variable to study the relationship among the pledge of major shareholders' equity,risk-taking ability and enterprise value.And further explore the influence of enterprise life cycle factors on the relationship between the three.The empirical results show that:(1)The greater the proportion of the first largest shareholder's pledged shares in their shares,the lower the enterprise value.(2)The relationship between the cumulative equity pledge rate and the enterprise value is inverted U-shaped.When the proportion of shareholders' cumulative Pledged Shares in the total shares of the enterprise is too large,shareholders'equity pledge behavior is not conducive to the improvement of enterprise value.When the proportion is at a moderate level,shareholders' equity pledge behavior is conducive to the improvement of enterprise value.(3)The continuous pledge does not necessarily reduce the enterprise value.For the enterprises whose cumulative equity pledge rate is more than 40%,the continuous pledge will significantly reduce the enterprise value.For the enterprises whose pledge ratio is low,the continuous equity pledge will not reduce the enterprise value.(4)The pledge of stock repurchase by pledge is positively related to the enterprise value,which is helpful to the improvement of the enterprise value.(5)The stock pledge breaking through the stock price warning line is negatively related to the enterprise value.If the stock price reaches the warning state after the pledge,the enterprise value will be reduced.(6)The risk-taking ability of the enterprise is positively related to the enterprise value,and plays a positive regulatory role in the pledge of major shareholders' equity and the enterprise value.(7)In different life cycle stages,the pledge of major shareholders' equity will have different effects on the enterprise value,and the effect of enterprise risk-taking ability in it is also different.In the growing period,the pledge of stock right plays the most important role in weakening the value of the enterprise,and the risk-taking ability plays the most important role.Based on the above conclusions,this paper respectively puts forward suggestions for listed companies,external regulators and pledgees.Listed companies can reasonably design equity plans and actively negotiate with major shareholders.At the same time,they should improve their risk-taking ability and flexibly manage equity pledge according to their life cycle;External regulators should strengthen the disclosure and supervision of equity pledge,establish and improve the long-term early warning mechanism of equity pledge;The pledgee should evaluate the risk of equity pledge and actively play the role of external supervision.