The Controlling Shareholder’s Equity Pledge And Corporate Philanthropic Giving

In recent years,the equity pledge scale of A-share listed companies in China has maintained continuous growth and the controlling shareholder’s equity pledge has gradually become a heated issues.When the listed company’s share price fell sharply and the controlling shareholders of listed companies who are faced with financial difficulties can’t timely call margin or guarantee,they may face the risk of control transfer.Therefore,the controlling shareholders have pressure and motivation to manage the market value and reduce the risk of control transfer.On the one hand,corporate philanthropic giving can help enterprises accumulate reputation and release a signal of good financial performance to the capital market.On the other hand,corporate philanthropic giving can influence external audit through"Impression Management" and reduce the probability of non-standard audit opinions issued by auditors.In addition,corporate philanthropic giving helps companies to build closer political connection,so that they can turn to the government for assistance when necessary.Therefore corporate philanthropic giving may be one of the market value management methods adopted by controlling shareholders to reduce the risk of control transfer.This paper chooses the data of A-share listed companies from 2009 to 2018,using empirical research methods to explore how the controlling shareholder’s equity pledge will influence the philanthropic giving,and how media attention,audit quality and performance pressure will affect the correlation between controlling shareholder’s equity pledge and corporate philanthropic giving.The empirical results show that:(1)Compared with companies without controlling shareholder’s equity pledge,the philanthropic giving level of companies with controlling shareholder’s equity pledge is higher;(2)Media attention will enhance the positive correlation between controlling shareholder’s equity pledge and philanthropic giving.(3)When an enterprise is faced with high-quality external audit,the positive correlation between controlling shareholder’s equity pledge and philanthropic giving level will be enhanced.Further research finds that(4)When listed companies face short-term performance pressure,companies with controlling shareholder’s equity pledge intend to reduce their philanthropic giving level.The research conclusions have certain significance for the supervision department to improve the relevant regulations of equity pledge and disclosure rules of enterprise information,and help investors better understand the real motivation of corporate philanthropic giving and pay attention to the relevant investment risks.