Stock Rights Pledging Of Large Shareholders And Cost Stickiness Of The Listed Companies

Cost management plays an important role in the production and operation activities of the company.Because cost management is an internal activity of the company and cost information often belongs to confidential information,it brings difficulty to the cost management research.Research on cost stickiness helps to explain the "black box" of corporate cost management behavior.The understanding of cost management behavior can provide insight into the company's operation and management efficiency,and provide a basis for stakeholders to make scientific decisions.Equity pledge is a fast way to get financing and the financing threshold is relatively low.Since Shanghai and Shenzhen stock exchanges carried out the activity of stock pledge repurchase in 2013,the number of listed companies and the level of pledge through on-market and off-market pledge have been increasing every year.It is becoming more and more common for shareholders of listed companies to raise funds through equity pledge.Equity pledge is actually a mortgaged borrowing behavior.Large shareholders raise funds through equity pledge,which alleviates their own financing constraints,but also brings it with certain risks.When the share price of the company falls to the open line,the pledgee has the right to liquidate the pledged equity.Shareholders may lose control of the company,which is usually the most important power for shareholders.As the risk of losing control right exists objectively,the large shareholders are likely to intervene in the behavior of the listed company.This paper takes the data of A-share listed companies in China from 2011 to 2018 as a sample,discussing the effect of pledge of large shareholder's equity on listed companies from the mechanism of “pledge of large shareholder's equity——risk of losing control right transfer ——cost stickiness of listed companies” and studying whether the pledge of stock rights of large shareholders will affect the cost stickiness of the company.According to the regression results,conclusions are as follows.(1)The cost stickiness is significantly higher in the companies with the equity pledge of large shareholders,and above conclusion has strong robustness.Human capital density and fixed capital density are important driving factors of cost stickiness.(2)The level of equity pledge can measure the degree of approximation between stock price and pledge price to a certain extent,and the impact of different approximation degree on cost stickiness will also be different.The higher the pledge level is,the higher the risk of losing control right is,resulting in stronger cost stickiness.(3)Different time periods of stock pledge have different influences on the cost stickiness.The cost stickiness is significantly higher in the companies with continuous equity pledge.In addition,because company's stock price is directly related to the risk of losing control right,this paper analyzes the impact of stock price changes on the relationship between equity pledge and cost stickiness.When the overall stock market tends to fall,that is,when the stock market is in a bear market,the risk of losing control right is high,and the effect of the pledge of large shareholders on the cost stickiness is more obvious.Furthermore,when the company's stock price is relatively close to the closing warning line,the effect of the pledge of large shareholders on the cost stickiness is more obvious.This paper also studies the effect of different equity nature on the relationship between equity pledge and cost stickiness.It has been discovered that compared with the state-owned companies,cost stickiness in non-state-owned company with large shareholders' equity pledge is more obvious.This paper studies the economic consequences of equity pledge from the perspective of cost management,which enriches the research on the economic consequences of equity pledge It is not only conducive to a more comprehensive and in-depth analysis of the causes of cost stickiness,but also able to guide and control the cost management behavior of companies in a more targeted way,providing a practical reference for the reasonable construction of corporate governance and the effective implementation and promotion of the cost management.