Influence Of Equity Pledge Of Controlling Shareholder On Stock Price Fluctuation

Since the issuance of the stock pledge buyback transaction business method in2013,equity pledge is gradually into public view,major way is included in the financing of listed companies,controlling shareholders equity pledge phenomenon is becoming increasingly commonplace.Equity pledge can not only solve the financing dilemma faced by the company,but also retain the control right of the pledged shareholders.Meanwhile,it has the characteristics of high efficiency and low cost.However,after equity pledge,shareholders may face the risk of the company’s stock price falling,and will lose the control of the company if it falls to the liquidation line.Therefore,it is of great practical significance for listed companies to improve their operation and management by analyzing the consequences of equity pledge of controlling shareholders and considering whether the negative effects of equity pledge can be suppressed through real earnings management.First of all,this paper consulted and sorted out relevant literatures in various databases,and summarized the influence of equity pledge on stock price volatility from the perspective of the motivation of companies to choose equity pledge and the possible economic consequences.Then the real earnings management thought is introduced to sort out the relationship between the three.Combining related theories,the current situation of equity pledge in recent years is analyzed,and the research hypothesis of this paper is proposed.Secondly,according to the research hypothesis and purpose,A-share listed companies for ten consecutive years from 2012 to 2021 are selected as the research samples.After processing the basic data,empirical analysis is carried out to verify the validity of the hypothesis according to the results.With the company’s annual amplitude and stock price return volatility as independent variables,and the equity pledge behavior and shareholders’ cumulative pledge ratio at the end of the year as dependent variables,this paper studies how the controlling shareholders’ equity pledge affects the company’s stock price volatility.Then,real earnings management is added to study the impact of real earnings management level on stock price volatility.Finally,taking real earnings management as a moderating variable,this paper studies the mechanism of its effect on the stock price of the controlling shareholder’s equity pledge.The heterogeneity analysis is carried out in groups with different firm properties,and then the robustness test is carried out by replacing the variable measurement method of real earnings management.The results show that the stock price fluctuation of listed companies with equity pledge behavior of controlling shareholders is more obvious.Meanwhile,the higher the cumulative pledge rate of controlling shareholders is,the greater the fluctuation range of stock price is affected.The company can stabilize the stock price through real earnings management.When the controlling shareholder undertakes equity pledge,the real earnings management can restrain its negative impact on the stock price fluctuation.In addition,compared with state-owned enterprises,when shareholders’ equity pledge of non-state-owned companies,the more obvious the degree of stock price fluctuation,the greater the adjustment effect of real earnings management on controlling shareholders’ equity pledge on stock price fluctuation.The model passed the robustness test,which further strengthened the reliability of the empirical results.Finally,this paper sorts out and summarizes the research conclusions of this paper,and puts forward appropriate suggestions.Supervision and relevant departments need to properly introduce relevant regulations on equity pledge,set constraints on relevant elements of equity pledge,and distinguish different requirements for companies in different industries with different equity properties.The listed company should consider the business needs of the company to make reasonable use of equity pledge for financing,strengthen risk control and supervise the behavior of the pledged shareholders.Investors should be able to identify the real purpose of the company’s equity pledge,and timely adjust the investment strategy.The pledgee should make a comprehensive investigation before and after the equity pledge and make prudent decisions to avoid the risks caused by the self-interested behavior of the pledging company.