Research On The Relationship Between Equity Pledges And Financial Risks Of Electric Power Companies

Power industry is a basic industry of the national energy industry,and the rapid development of the national economy makes the demand for electricity increase continuously,and the power enterprises need a lot of capital support to promote the rapid development of the enterprises,and the equity pledge method helps to broaden the financing channels of the company and provide many facilities for the company to solve the capital problems,so many power enterprises choose to meet their growing capital demand through the equity pledge method,but In the context of imperfect external control mechanism and regulatory system,the phenomenon that the financial risk of electric power enterprises increases dramatically due to the equity pledge method cannot be ignored.To this end,this paper studies the relationship between equity pledges and financial risks of electric power enterprises in order to regulate the equity pledging behavior of electric power enterprises and prevent the financial risks of enterprises.This paper compares and summarizes the relevant literature,explains the concepts of equity pledge,financial risk and controlling shareholder,studies the relationship between equity pledge and corporate financial risk of electric power enterprises based on information asymmetry theory,signaling theory,principal-agent theory,privity of control theory and preferential financing theory,and proposes relevant hypotheses accordingly.This paper takes listed electric power enterprises in Shanghai and Shenzhen A-shares from 2010 to 2020 as the research object,uses financial risk as the explanatory variable and equity pledge as the explanatory variable,and conducts an empirical analysis to test the relationship between equity pledge and corporate financial risk in electric power enterprises,and further explores the effects of equity concentration and executive shareholding ratio on the relationship between the two.The results show that,controlling for other conditions,the relationship between equity pledges of electric power companies and corporate financial risk is significantly positive;further study finds that equity concentration significantly weakens the positive effect of equity pledges of electric power companies on corporate financial risk,and executive shareholding ratio significantly suppresses the positive effect of equity pledges of electric power companies on corporate financial risk.Finally,this paper conducts endogeneity tests and robustness tests by lagging one period and replacing the explanatory variable financial risk and the explanatory variable equity pledge,and the results obtained strengthen the reliability and robustness of the paper’s findings.Based on the findings of the empirical study,this paper makes the following recommendations for the government,enterprises,small and medium-sized investors and pledgees:on the part of the government,improve the relevant laws and regulations on equity pledges;enhance the external supervision of equity pledges to weaken the negative impact of equity pledges on the financial risk of electric power enterprises;open up diversified financing channels to solve the financing difficulties of some enterprises The problem.On the part of enterprises,they should take equity pledges with caution;improve corporate governance system and promote benign development of the company;construct financial risk early warning system and improve the ability of power enterprises to prevent risks.Small and medium-sized investors and pledgees should establish risk awareness and avoid financial risks.