Impact Of Non-controlling Large Shareholders’ Share Pledge On Stock Price Crash Risk

This paper studies the effect of non-controlling large shareholder equity pledge on stock price collapse risk under the institutional background of China,and explores the transmission mechanism between non-controlling large shareholder equity pledge and enterprise stock price collapse risk from the perspective of internal accrual earnings management behavior and related party transactions.With the drastic fluctuations of China’s stock market,many stocks have experienced severe declines,and equity pledge liquidation has occurred,which has also triggered the universal attention and worry of the whole society on equity pledge risk.Existing studies have explored the impact of equity pledge behavior on the stock price collapse risk of listed companies,but mainly focused on the controlling shareholder’s equity pledge,and these studies often ignore the potential risks brought by non-controlling large shareholder equity pledge.Therefore,this paper chooses non-financial listed companies on A-shares(Shanghai Stock Exchange,Shenzhen Stock Exchange,Beijing Stock Exchange)from 2012-2021 as research samples,and adopts empirical research methods to study the following questions:(1)Explore the impact of non-controlling large shareholder equity pledge on the stock price collapse risk of listed companies(2)Earnings management behavior as a non-controlling large shareholder equity pledge impact on listed company stock price collapse risk transmission mechanism(3)Related party transactions as a non-controlling large shareholder equity pledge impact on listed company stock price collapse risk transmission mechanism.Empirical regression results show that:(1)Non-controlling large shareholder equity pledge increases the stock price collapse risk of listed companies,and the positive correlation between non-controlling large shareholder equity pledge and stock price collapse risk of listed companies is more significant in non-state-owned enterprises than in state-owned enterprises.(2)After the non-controlling large shareholder equity pledge,the level of earnings management of the enterprise increases,and the bad news is more likely to be concentrated and released after the equity pledge ends,leading to stock price collapse;(3)After the non-controlling large shareholder equity pledge,the level of related party transactions of the enterprise increases.As the related party transactions can play a role in beautifying reports and stabilizing stock prices,the stock price collapse risk of the company is reduced at this time.The contribution of this paper mainly lies in:(1)The research perspective of influencing stock price collapse risk is non-controlling large shareholder equity pledge,and there is no relevant research in the academic circles at present.The research of this paper enriches the research in non-controlling large shareholders,equity pledge and stock price collapse risk;(2)Exploring the transmission mechanism between non-controlling large shareholder equity pledge and enterprise stock price collapse risk.Previous scholars have explored the impact mechanism of earnings management as a controlling shareholder equity pledge affecting the stock price collapse risk of listed companies.There is a lack of research in the impact of non-controlling large shareholder equity pledge on the stock price collapse risk of listed companies;and past research has separately studied the level of related party transactions of enterprises after controlling shareholder equity pledge,and the impact of related party transactions on the stock price collapse risk of enterprises,without considering the two together.