Share Pledge Of Large Shareholders,Heterogeneity Of Institutional Investors And Firm Value

Share pledging can alleviate the financing constraint problem of enterprises because of the extensive and universal nature of share pledge’s subject matter,but it is also precisely because of the importance of the pledged subject matter and volatility of Stock price that the pledge process is often accompanied by high risks.So share pledging usually agrees performance guarantee agreements in pledge agreements in order to protect its own rights and interests,but that will increase the risk of losing control rights.Especially when large shareholders pledge share,if the stock price falls below the early warning liquidation line,and the pledgee cannot add the pledge,or unable to repay the matured debt,the pledger has rights to liquidate the position forcibly,and large shareholders may have to take the risk of losing control rights.Large shareholders have a strong incentive to carry out earnings management in order to maintain control rights of the company,which increases the degree of information asymmetry between the company and market investors,and even triggers crisis of investor trust.At the same time,after share pledge of large shareholders,the control and ownership of the company are further separated,and the conflict of interest between large shareholders and the minority shareholders intensifies,thereby the risk of tunneling by large shareholders increased.In addition,share pledging will also send a negative signal of financing constraints to the market,which will affect adversely enterprises.At the same time,the information asymmetry risk and the tunneling risk caused by share pledge of large shareholders are closely related to corporate governance,and institutional investors have a great significance to improve corporate governance.In particular,the stable institutional investors pay more attention to the long-term value of enterprises,have sufficient motivation to participate in corporate governance to protect their own interests,and their external independent identity can make up for the lack of internal supervision effectively,improve the quality of corporate governance,and supervise the behavior of major shareholders effectively.Therefore,on the basis of combing,summarizing and summarizing the existing research results,this paper selects listed companies in China’s A-share market from 2014 to2021 as research samples,takes relevant theories as guidance,analyzes the relationship between share pledge of large shareholders,heterogeneity of institutional investors and firm value at the theoretical and logical levels,selects appropriate measurement indicators,constructs the economic regression model,and explores the significance and robustness of the impact.Through the analysis of the empirical results,we conclude that(1)share pledge of large shareholders will have a negative impact on firm value,and with the increase of share pledge ratio of large shareholders,firm value will take a downward trend;(2)Compared with transactional institutional investors,stable institutional investors’ shareholding will inhibit the negative impact of large shareholders’ share pledge on firm value;(3)The share pledge of large shareholders not only affects the value of the enterprise directly,but also affects the value of the enterprise through the indirect path of earnings management;(4)The 2018 revised version of the New Pledge Regulations regulates the financing threshold,pledge ratio and use of funds for equity pledge,which alleviates the negative impact of large shareholders’ share pledge on firm value.Based on the conclusion of this paper,the research enlightenment and insufficient prospects of this paper are concluded.