Share Pledge,Heterogeneity Of Institutional Investor And Credit Spread Of Corporate Bonds

With the introduction and gradual improvement of relevant policies,the share pledge market has experienced a process from rapid growth to normative development.On the one hand,share pledging have alleviated the financing constraints of the company to a certain extent and has been widely used in the main body of the enterprise due to the advantages of simple and quick process and widespread target.On the other hand,share pledge of large shareholders will increase the separation degree of the two rights of the company,and also increase the risk of losing control rights,information asymmetry and tunneling of the company.Meanwhile,in recent years,the bond market has frequently occurred bond extension and default event,the risk of bond investment is increasing,which is not favorable to the healthy and stable development of the bond market.Therefore,it is of great significance to study the relationship between share pledge behavior of large shareholders and credit spread of corporate bonds.At the same time,the risk of information asymmetry and tunneling caused by share pledge of large shareholders are closely related to corporate governance.Institutional investors,as external independent investors,can effectively supplement the internal corporate governance.In particular,stable institutional investors take value investment as the concept and have enough motivation to actively participate in corporate governance,supervise the behavior of large shareholders and managers,reduce the agency cost and the risk of information asymmetry,so as to effectively restrain the influence of share pledge of large shareholders on credit spread of corporate bonds.The paper uses normative research method and empirical research method to review and summarize related literature such as economic consequences of equity pledge,influencing factors of bond credit spread and governance role of institutional investors.Based on relevant theories,the paper analyzes the theoretical logic among the three theories and proposes research hypotheses.furthermore,the paper selects corporate bonds issued by Chinese A-share listed companies from 2007 to 2021 as samples to empirically test the influence of share pledge of large shareholders on the credit spread of newly issued corporate bonds and the moderating effect of institutional investor heterogeneity on their relationship.In addition,considering the difference of financing constraints faced by stateowned and non-state-owned enterprises,the differences of the role of institutional investor heterogeneity in the relationship between state-owned and non-state-owned enterprises are tested by grouping according to ownership nature.The results show that:(1)Share pledge of large shareholders will increase the credit spread of corporate bonds,and the higher the proportion of share pledge,the larger the credit spread of corporate bonds.(2)Compared with trading institutional investors,stable institutional investors’ shareholding will inhibit the increase of large shareholders’ share pledge on corporate bond credit spread.(3)Compared with state-owned listed companies,it is more favorable for stable institutional investors to play an inhibitory role in non-state-owned listed companies.Subsequently,the paper further attempts to explore the mechanism of the influence of large shareholders’ share pledge on corporate bond credit spread.The results show that share pledge of large shareholders not only affects the credit spread of corporate bonds directly,but also affects the credit spread of corporate bonds through the degree of separation of two rights.According to the research results,the paper puts forward relevant policy suggestions from the perspectives of regulatory authorities,institutional investors and enterprises themselves,in order to alleviate the adverse risks of bond holders,and also provide references for reducing the cost of issuing bonds for enterprises and promoting the long-term development of enterprises.