Major Shareholder's Equity Pledge,Corporate Cash Holding And Innovation Investment

Under the background of diversified financing channels,equity pledge,a special financing method,has gradually become hot in the capital market.Equity pledge has separated the control and cash flow rights of major shareholders,exacerbating agency conflicts,especially in recent years.The emerging bear market has made equity pledged companies unable to add collateral and liquidate positions,which has attracted the attention of regulators,stakeholders and scholars.As the personal financial behavior of major shareholders,why does equity pledge cause enterprises to frequently risk?This is closely related to the special status of major shareholders in the company's development decisions.What kind of influence will the shareholder's financial behavior have on the company's strategic decisions and what mechanism is used to influence it?This article mainly discusses from the perspective of the impact on corporate innovation investment decisions.Innovation plays a pivotal role in the reform and upgrading of contemporary enterprises.Innovative enterprises are conducive to China's transformation from a large manufacturing country to a strong manufacturing country.The impact of equity pledge on corporate innovation investment is studied,and it is important for the government to promote innovation,strengthen investor protection,and long-term business.Development is of great significance.Equity pledge eases capital constraints and can logically help companies increase more innovation investment,but this is not the case.For large shareholders of equity pledge,equity pledge brings hidden risks of transfer of control rights and loss of cash flow rights.Later,the target of the small and medium shareholders deviated,and the major shareholders considered more complex factors when making innovative investment decisions.Is it for the purpose of capturing additional income and maintaining their own status? Risks,it is necessary to furtherexplore the mechanism of the impact of equity pledge of major shareholders on corporate innovation investment,Through a combination of theory and literature,this paper chooses the special perspective of cash equivalents retained by enterprises,that is,cash holdings.This article combines the research methods of normative research and empirical test to first sort out the relevant literature and theory of equity pledge,corporate cash holding and corporate innovation,in an attempt to clarify the theoretical support and logic between the three relationships.Combining agency theory,control right theory,pledge mechanism,signal transmission theory,innovation theory,information asymmetry theory,and cash holding theory are put forward.This article first discusses the impact of equity pledge of major shareholders on corporate innovation investment,then from the perspective of corporate cash holdings,analyzes the performance of corporate cash holdings after equity pledges,and analyzes the impact of cash holding equity pledges on innovative investments Whether the mechanism is internally linked,In addition,the influence of heterogeneity of major shareholders on equity pledge is further analyzed,and the choice of cash holding strategy is used to test the effect of corporate value transmission.During the specific empirical test,the data of Chinese A-share listed companies from 2014 to 2018 were selected as observation values,and the research sample of this paper was obtained by screening and elimination by Excel,and descriptive statistics and correlation analysis were performed using Spss.Subsequently,the models at home and abroad were used for correction,and multiple regression analysis was performed by Stata to verify the hypothesis.After the robustness test,the results were analyzed and the research conclusions of this paper were drawn:(1)Equity pledge of major shareholders will significantly inhibit the innovation investment of the enterprise;(2)Equity pledge will have a negative impact on the company's cash holdings,that is,the major shareholders who separated the two rights after pledge were more motivated by profit appropriation,Grab listed company funds to form a "hollowing effect";(3)corporate cash holdings play a part of the intermediary role in the impact of major shareholder equity pledges on corporate innovation investment;(4)a moderate increase in the proportion of major shareholders The combination of two positions helps to alleviate the negative relationship between equity pledge and innovation investment.That is,a moderate increase in the shareholding ratio will help large shareholders of equity pledges to reduce short-sighted behavior.Greater resistance is encountered inmaking decisions about encroachment.(5)After the equity pledge,the major shareholders adjust the company's cash holding strategy,which will negatively affect the value of the company by intervening in the company's cash holdings.The research in this article broadens the perspective of the impact of large shareholder equity pledge on the study of corporate economic consequences,and provides directions for the supervision of equity pledged companies and the improvement of internal governance of equity pledged companies.In the future,we can use the structural equation model to further explore the degree of influence of major shareholder equity pledge on corporate innovation investment under various influence mechanisms.