Controlling Shareholder's Equity Pledge,Quality Of Internal Control And Commercial Credit Financing

Since the guarantee law of 1995 established the equity pledge system,as a new financing method,equity pledge has developed rapidly.In 2018,3422 of the listed companies in China participated in equity pledges,and the cumulative number of pledged shares reached 634.5 billion.The A-share market reflects the phenomenon of "full-stock pledge".With the continuous popularization of this financing method,its potential Risk is also a concern for all parties in the market.Behind the pledge of equity means that the controlling shareholder may have the motivation to hollow out the listed company,as well as the conduct of earnings manipulation on the financial statements in order to avoid the risk of control transfer caused by the stock price decline.These risks will seriously affect the daily operating activities of the listed company Adverse effects.Therefore,in the context of the frequent occurrence of equity pledge issues,suppliers will reduce their credit risk and bad debt losses,thereby reducing the provision of commercial credit to equity pledged listed companies.In recent years,internal control has also received a certain amount of attention in corporate governance,and has been continuously improved and improved with the encouragement of the government.Then,can high-quality internal control effectively relieve the information asymmetry between listed companies and suppliers with equity pledges,strengthen supplier trust,and ultimately affect the commercial credit financing obtained by equity pledged companies?This article selects the data of all A-share listed companies in China from 2013 to2018.Based on the principal-agent theory,the information asymmetry theory,and the signal transmission theory,this paper constructs relevant models for empirical analysis,and explores the controlling shareholder's equity pledge and the company's commercial credit financing.Relevance and the regulating effect of internal control in the relationship between the two,and further explore the relationship between the controlling shareholder's equity pledge and the company's commercial credit financing and the differences in the regulating effect of internal control when the nature of property rights is different.Finally,the regression was performed by replacing the variables and changing the sample data,which confirmed the robustness of the conclusions of this paper.This paper finds that:(1)the controlling shareholder's equity pledge has a significant negative correlation with the company's commercial credit financing,that is,the higher the controlling shareholder's equity pledge rate,the lower the company's commercial credit financing;(2)the quality of internal control can significantly weaken the controlling The negative relationship between shareholder equity pledge and the company's commercial credit financing;(3)The negative correlation between the equity pledge of the controlling shareholder of the non-state-owned enterprise and the company's commercial credit financing is more significant than that of the state-owned enterprise.The controlling effect of quality control is more significant.The research conclusions of this paper not only enrich our country's research on equity pledge,but also help to regulate the behavior of equity pledge,improve related rules and regulations,and protect the rights and interests of stakeholders,which has certain reference significance.