Analysis Of The Investment Behavior And Economic Consequences Of Enterprises Under The Pledge Of Controlling Shareholders’ Equity

In 2015,the Central Economic Work Conference put forward the economic policy of "three removals,one supplement and one reduction",which made it more and more difficult for companies to raise funds,and many companies gradually turned to equity pledges for financing.However,in recent years,the state has gradually begun to pay attention to the risks brought by equity pledges to enterprises.On October 9,2020,the State Council issued the "Opinions of the State Council on Further Improving the Quality of Listed Companies".Article 9 states that the risks of pledged shares of listed companies should be actively and steadily resolved.With the increasing concentration of the equity structure of private enterprises,this makes major shareholders less constrained in terms of equity pledges,and enterprises have greater operational risks.In summary,the question studied in this article is: How does the pledge of controlling shareholders’ equity affect the investment behavior of the enterprise? What are the economic consequences?At present,domestic and foreign literature has conducted in-depth research on the motive of equity pledge and its economic consequences.However,since most of the previous documents are empirical studies,there is little in-depth analysis of the changes in the investment behavior of a company before and after the equity pledge of a case company.Therefore,this paper takes Y Company,a private listed company in the real estate industry with the top 10 share pledge ratio in the A-share market,as a case company,using case studies and a combination of quantitative and qualitative research methods,with the controlling shareholder’s share pledge as the background,A more comprehensive and in-depth dynamic exploration of the dynamic changes of the company’s investment behavior and the economic consequences after the equity pledge,and put forward corresponding suggestions.Through analysis,this article draws the following conclusions:(1)After the controlling shareholder pledges equity,the company invests funds in new industries,increasing the investment in construction in progress,innovation investment and mergers and acquisitions related to the new industry,reducing the amount of investment in the main business real estate Investment.(2)When the controlling shareholder pledges equity,the separation of the two rights and the increased risk of the transfer of control rights will prompt the majority shareholders to increase their self-interested investment activities.(3)The pledge of controlling shareholders’ equity has seriously damaged the company’s financial status.In order to reduce the damage to the corporate value of the equity pledge,this article puts forward the following suggestions:(1)At the company level,establish a sound equity check and balance mechanism,strengthen internal communication,and monitor the equity pledge ratio in real time.(2)At the regulatory level,strengthen internal and external supervision and improve relevant information disclosure mechanisms.(3)At the investor level,be alert to a high proportion of equity pledges,and actively pay attention to company trends and investment industry policies.This article analyzes the dynamic changes in the investment behavior of the enterprise before and after the equity pledge,which helps to regulate the equity pledge and investment behavior of the controlling shareholder,reduce their interest encroachment behavior,and protect the interests of small and medium shareholders;it helps investors pay attention to the equity pledge of the enterprise in a timely manner Proportion changes and investment behavior can reduce investment risks;it will help regulators formulate more complete policies,standardize the quality of information disclosure of listed companies,supervise corporate equity pledges and investment behavior,and reduce corporate hollowing out.