Pledge Of Controlling Shareholder’s Equity And Quality Of Enterprise Development

Equity pledge and high quality development have become two hot words in China’s economic field.Since high-quality development of enterprises is an important part of the economy,great efforts should be made to improve the quality of enterprise development.Equity pledge has been developing for a long time in China’s capital market,and it has become one of the main means of financing for large shareholders.In this paper,the research object of equity pledge is limited to the controlling shareholders,because as the actual controller of the enterprise,they have the ability to influence the development of the enterprise through their own behavioral decisions,and the equity pledge behavior they take will inevitably have an impact on the management of the enterprise.So,is the comprehensive effect of stock pledge of controlling shareholders positive or negative? To this end,this paper combined with the enterprise performance and core competitiveness,productivity,growth factors and social value of five aspects,by using entropy value method "to empowerment of the above factors,construct the comprehensive indicators of enterprise development,enterprise development quality,to explore the controlling shareholder equity pledge to the synthetical effects of the enterprise development.Based on the analysis of the influence mechanism of stock pledge of controlling shareholders on the quality of enterprise development,this paper empirically tests the relationship between them by using the relevant data of China’s a-share listed companies from 2013 to 2017.The research found that,in general,the stock pledge of controlling shareholders significantly improved the quality of enterprise development,but there was heterogeneity between the two.From the micro perspective,there are differences in the relationship between the two sample groups.Only in the group with a high shareholding ratio of controlling shareholders,the group with a low equity pledge rate of controlling shareholders,the group with a large board size group and the group with a high proportion of independent directors can a positive significant relationship be established.From the macro perspective,only in the eastern region with a high degree of marketization can the positive significant relationship between the two be established.Further research found that effective market value management is the internal mechanism of the positive relationship between the two.At the same time,in the part of robustness test,instrumental variable method,DID regression and PSM were adopted to test the possible endogenous problems,so as toensure the reliability of the results.Based on the empirical results,this paper puts forward the following three policy Suggestions: first,while continuing to support the financing behavior of equity pledge adopted by controlling shareholders,the government should strengthen supervision and guidance on this behavior and guide enterprises to carry out effective market value management;Second,the regulatory authorities should strengthen the supervision of enterprises with high ownership pledge ratio(such as more than 50%).Third,the government should continue to promote the process of regional market-oriented construction,which is conducive to major shareholders relying on equity pledge financing to improve the quality of enterprise development.This study is helpful to enrich the literature on equity pledge and enterprise development quality.