A Study On The Motivation And Economic Consequences Of Controlling Shareholder’s Share Pledge

In recent years,equity pledge,as a highly sought after means of debt financing,has further broadened the financing channels of enterprises.With good liquidity and liquidity,equity pledge can help controlling shareholders quickly obtain funds,and plays a very important auxiliary role as a financing means.However,due to the reality of "single dominant share" in the Chinese market,the imperfect laws and regulations related to the capital market,and the need to improve the level of market supervision,there has not been a clear conclusion about the impact of controlling shareholders’ equity pledge on the company.Therefore,in this thesis,this article will be the controlling shareholder equity pledge as the research subject,with investors view as the breakthrough point,from the equity motivation,the Angle of money and the influence mechanism research,and combined with case to argue that in order to explore the controlling shareholder equity pledge the pros and cons of influence,for investors and relevant regulators provide certain enlightenment and Suggestions.Based on the logic of "controlling shareholder’s equity pledge motive-influence mechanism-economic consequences",this thesis selects Improve Medical as the case study object,and discusses the pros and cons of controlling shareholder’s equity pledge on the business operation of listed companies.By summarizing the research results at home and abroad and starting from the signal theory,preferential order financing theory,controlling shareholder support theory and efficient market hypothesis,this thesis summarizes the relevant laws and regulations of equity pledge and the current situation of equity pledge in capital market in recent years.Combined with the case of the company’s investment behavior,financing behavior,business performance,the company stable stock price cost and other aspects of the motivation and economic consequences of the controlling shareholder equity pledge.Studies have found that the controlling shareholder in the listed company equity pledge their money itself to support the development of the company,help us ease the financing constraints,and the debt service pressure,under the influence of the control of pressure,the controlling shareholders have greater power continuously improve enterprise management,to the enterprise the management behavior of optimization,make enterprise management more rational and stable.However,equity pledge financing cannot fundamentally solve the business problems of enterprises.Enterprises need to obtain funds through other means to deal with the capital turnover,such as improving the company’s business performance,accelerating the recovery of accounts receivable,developing vacant capacity or selling subsidiaries for financing.On the basis of theoretical research results and institutional background,combined with the case of equity pledge of the controlling shareholder of Improve Medical,this thesis puts forward the following suggestions: First,implement and strengthen the information disclosure system of equity pledge;Second,each department strengthens the information sharing to the stockholder’s equity pledge;Third,improve and enrich the financing channels of listed companies;Fourthly,the pledgor himself should strengthen the evaluation of the use of equity pledge.The contributions of this thesis are as follows :(1)Through identifying the motivation and capital investment of controlling shareholders,this thesis reveals the deep reasons behind controlling shareholders’ behavior of pledging equity,which is also helpful to better understand the economic consequences of pledging equity;(2)The research on public information in this thesis is helpful for investors to identify the motivation of equity pledge,and has important reference significance for investors’ investment decisions;(3)Starting from the influence mechanism of controlling shareholders’ equity pledge on enterprise operation,the thesis finds that under the background of equity pledge,enterprises pay more attention to maintaining long-term and stable development of enterprises.From this perspective,controlling shareholders’ equity pledge has positive significance for enterprises.