Equity Pledge And Stock Mispricing

In China,capital market has not yet reached a semi-strong and effective level,and there is a deviation between the intrinsic value of the company and the market value,which will not only affect the judgment of the valuation results,but also affect the decision-making of investors and reduce the pricing efficiency of the capital market.At present,the research on the influencing factors of stock mispricing in academia focuses on the characteristics and policies of the financial market,and pays less attention to the internal factors of enterprises.Equity pledge,as an important financing method for controlling shareholders of an enterprise,may promote stock mispricing due to the tunnel effect and the terms of pledge liquidation.Therefore,based on the residual income model,this paper will study the impact degree and mechanism of equity pledge on stock mispricing.This paper adopts the research method combining theoretical analysis and empirical analysis.First,this paper determines the research direction of this paper through literature review and puts forward research hypotheses through theoretical analysis.Secondly,based on the data of listed companies in the A-share market from 2011 to 2020,the residual income model is used to estimate the intrinsic value of the company,and a stock mispricing index and a series of explanatory variables are constructed.Finally,the research hypotheses are tested through empirical models.The research results show that:the controlling shareholder’s equity pledge will promote the mispricing degree of listed companies’stocks.The higher the pledge ratio,the greater the mispricing degree,and this promotion effect is only significant for companies whose market value is overvalued.In earnings management,only real earnings management plays an intermediary role,while accrued earnings management does not play an intermediary role.Internal control plays a negative regulatory role.The innovation of this paper is to enrich the research on the transmission mechanism of the impact of equity pledge on stock mispricing,to provide a direction for the improvement of valuation models to adapt to market changes,and to provide investors with a new perspective for analysis.