| In recent years,equity pledge has become one of the important financing methods in the capital market.According to the statistics of CSMAR database,as of September 2,2022,there are 403.08 billion shares used for equity pledge in the market,and a total of 2459 listed companies in the whole market use equity pledge for financing,that is to say,more than half of the listed companies have pledged behavior.Although the behaviors of controlling shareholders do not belong to the scope of the company,their behaviors will influence the company.In view of whether the equity pledge behavior of controlling shareholders may aggravate the degree of enterprise financialization,this paper empirically studies the impact of equity pledge of controlling shareholders on corporate asset allocation by taking non-financial listed companies in Shanghai and Shenzhen A-share markets from 2014 to 2021 as samples.This paper finds that the equity pledge of controlling shareholders increases companies’ allocation of financial assets,reduces the net cash flow generated by operating activities,and hence increases the risk of excessive financialization of companies.Further analysis shows that equity pledge of controlling shareholders may affect the asset allocation of companies through increasing financing constraints,increasing excessive investment and increasing capital embezzlement,thus causing the risk of excessive financialization.After the occurrence of public health emergencies,the equity pledge behavior of controlling shareholders will not significantly increase the allocation of financial assets of enterprises.Such effect of excessive financialization is more significant in non-state-owned enterprises.The main contributions of this paper are as follows:Firstly,the research of this paper extends the research on the influence of controlling shareholder’s equity pledge and the motivation of enterprise financialization to a certain extent;Secondly,by further studying the transmission path of the mediating effect,this paper can deepen the understanding of the relationship between equity pledge and corporate financialization.Thirdly,by comparing the data before and after the outbreak of COVID-19,this paper can help to understand whether the effect of controlling shareholder pledge behavior on corporate financialization will be affected by the COVID-19 epidemic. |
