Will The Pledge Of Controlling Shareholder’s Equity Affect The Value Of The Enterprise?

Enterprise value evaluation is an important part of asset evaluation.How to determine the factors affecting enterprise value is the basis of correct evaluation.However,there are so many factors that affect the value of an enterprise.In the actual evaluation,we can only focus on the main contradictions and focus on the most important factors.However,this mode of operation may lack of consideration for some enterprises with special circumstances,such as the phenomenon of shareholders’equity pledge,especially the enterprises with controlling shareholders’ equity pledge.Although it is said that the controlling shareholder’s equity pledge is a kind of financing behavior of individual shareholders,due to the unique status of the controlling shareholder in the enterprise,the consequences of the equity pledge often have an impact on the value of the enterprise,and sometimes the impact is greater and can not be ignored.Therefore,whether standing in the perspective of enterprise value evaluation or corporate governance,it is necessary to further study the impact of controlling shareholder equity pledge on enterprise value?How does it affect enterprise value?What are the transmission pathways?And are there any third-party factors at work?Further research is needed.This paper uses the data of private enterprises listed in China’s A-share market from 2010 to 2018 as the research sample,and uses multiple regression analysis to test the relationship between the share pledge ratio of controlling shareholders and enterprise value,and the empirical data show that there is a significant negative correlation between the two.It means that the controlling shareholder’s equity pledge will bring adverse effects to enterprises,and further research shows that this relationship is more significant after 2015 than before 2015,and small and medium-sized enterprises are more significant than main board enterprises.The empirical data also support that ownership concentration and institutional ownership can alleviate the negative impact of controlling shareholders’ equity pledge on enterprise value,affirming the role of equity balance and institutional supervision,and finding that the role of capital investment is not significant.At the same time,the intermediary effect test shows that the controlling shareholder’s equity pledge will play a part of intermediary effect on enterprise value through the separation of ownership and R&D investment.However,tax evasion is not significant and there is no intermediary effect.Finally,this paper puts forward relevant suggestions from the perspectives of listed enterprises,investors,regulatory agencies,Pledgors,pledgees,asset evaluators,etc.