A Comparative Study On The Economic Consequences Of Controlling Shareholder's Equity Pledge

Since equity pledge entering the capital market of China,it has been favored by many controlling shareholders of companies because of its special financing advantages.The controlling shareholder's equity pledge is a normal market financing behavior.Controlling shareholders can obtain financing through equity pledge to promote the company's development.However,in recent years,many incidents of company crisis caused by the controlling shareholder pledge have occurred frequently.In this context,I hope that through the research in this paper,it will help to regulate the equity pledge behavior of the controlling shareholder of the company,and it can play a certain warning role for the controlling shareholder pledge of the capital market.This paper adopts case study method,selects L company and D company as the research object,and uses comparative analysis method to compare the economic consequences of controlling shareholder pledge on the company based on information asymmetry theory,principal-agent theory and control theory.This article takes the equity pledge of the controlling shareholders of the two companies as the entry point.Firstly,the basic situation of the two companies was introduced from two aspects of company profile and shareholding structure,and the situation of the equity pledge of the controlling shareholders of the two companies was introduced and compared.Secondly,it analyzes the motives of the company's controlling shareholders' equity pledge from the company's cash flow,capital flow,controlling shareholder's reduction behavior and financing channels.Thirdly,compare the changes in the degree of separation of the two powers during the pledge of the controlling shareholder of the two companies,use the financial indicators to compare and analyze the changes in the financial status of the two companies,and analyze the change trend of the company's value by calculating the Tobin Q value.Through the comparative study of the previous cases,it is concluded that: the pledge of the controlling shareholder's equity under the malicious motive will have negative economic consequences for the company;the pledge of the controlling shareholder's equity under the act of goodwill will have positive economic consequences for the company.Through comparative analysis of the two companies,the following countermeasures are proposed: improving the corporate governance structure,strengthening information disclosure,increasing the punishment for violations and strengthening external supervision.Through the comparative analysis and countermeasures of this paper,it is hoped that companies will strengthen the regulation of controlling shareholding pledge of controlling shareholders,and correctly use the equity pledge financing method to promote the sustainable development of companies.