Research On The Impact Of Controlling Shareholders' Equity Pledge On The Quality Of Performance Forecast

In recent years,equity pledge has become an important financing method in the capital market due to its advantages of low financing cost and convenient operation procedures.Although equity pledges have incorporated a large amount of funds into listed companies,but because of equity pledge is closely related to the company's stock price and stock price fluctuate in a wandering state,when the share price fell sharply the pledge of shares will face broke in risk,may lead to a change in the actual control of controlling shareholders,therefore,how to avoid the risk of transfer of control rights caused by equity pledge has become an important issue facing controlling shareholders.As an important source of earnings forecast information,performance forecast is an important part of capital market information disclosure activities.On the one hand,it can estimate the future operating results of enterprises and alleviate the problem of information asymmetry.On the other hand,it also provides an opportunity for controlling shareholders to avoid the risk of control transfer by using performance forecast.Then whether the controlling shareholder's pledge of equity will affect the quality of the performance forecast?At present,most domestic and foreign scholars study the pledge of controlling shareholder's equity from the perspective of internal and external governance mechanism,and few literatures study how the pledge of controlling shareholder's equity affects the quality of company's performance forecast disclosure.Therefore,based on the equity pledge with natural experiment and earnings forecast disclosure as the breakthrough point,this paper investigates the relationship between the pledge of controlling shareholders' equity and the quality of performance forecast.It is found that the pledge of controlling shareholder's equity reduces the quality of performance forecast disclosure,and the two are negatively correlated.Good news,high quality internal control and high shareholding ratio of institutional investors can restrain the negative effect of pledge of controlling shareholders' equity on the quality of performance forecast.There are five parts in this paper: introduction is the first part,which expounds the research background,significance and innovation points,systematically sorts out and summarizes the literature on the influencing factors of the performance forecast quality oflisted companies and the economic consequences of the pledge of controlling shareholders' equity.The content of the second part includes concept definition and theoretical basis,introduces the five concepts of controlling shareholder,pledge of controlling shareholder's equity,performance forecast,internal control and institutional investor,and expounds the impact of controlling shareholder's pledge of equity on the quality of performance forecast.The third part is the theoretical analysis and research hypothesis.First,it describes the origin and development of China's equity pledge system and performance forecast system as well as the status quo of equity pledge and performance forecast.The fourth part is an empirical test,which verifies the above four hypotheses by testing 10,116 research samples of a-share listed companies in Shanghai and shenzhen from 2010 to 2018,and makes a written explanation.The fifth part is the conclusion,policy suggestion and research insufficiency of this paper.The contribution of this paper lies in:(1)from the perspective of earnings forecast disclosure,researches the controlling shareholder equity pledge on the quality of the earnings forecast,expand the controlling shareholder equity pledge economic consequences research,to understand the company's performance forecast disclosure provides incremental evidence,helps to further understand the controlling shareholder equity pledge the impact on the company decision-making behavior.(2)further analyzes whether there are differences in the influence of equity pledge on the quality of performance forecast under different message nature.In addition,two internal and external governance mechanisms,the quality of internal control and the shareholding ratio of institutional investors,are introduced to explore whether they have a certain regulatory effect on the relationship between them,which enriches the relevant research literature.