A Study On The Influence Of Marketization Level And The Timing Of Financing On The Stock Pledge Of The Largest Shareholder

With the rapid development of China's capital market,the characteristics of transparency and easy circulation of stock and other advantages have become increasingly prominent,financial institutions such as banks are more willing to accept stock–pledged loans.The introduction of stock pledge-style repo make the pledge of stock great growth,now,stock pledge is becoming an important means of financing for the largest shareholders.But in recent years,the phenomenon that the price of pledged-stock goes down below the warning line has occurred,and there are scholars found that stock pledge to become a means of embezzling the resources of listed companies by the major shareholder.It is great significance to study the factors that influence stock pledge,which could help us deepen the understanding of the behavior of stock pledge by the largest shareholder.Then we could regulate and control the development of stock pledge better,and it is good for maintaining the stability of financial market,the stable operation of enterprises as well as the interests of small investors.This paper starts with the external factors that affect the stock pledge of the largest shareholder,and studies the influence of marketization level and the timing of financing on the stock pledge of the largest shareholder.Firstly,based on the theory of Efficient Market Hypothesis,Principal Agency Theory and Market Timing theory,this paper analyzes the influence mechanism of the marketization level and market timing on the stock pledge.Secondly,combined with the multiple regression method of Logit and Tobit,this paper takes the quarterly data of Shanghai and Shenzhen A-share listed companies between 2008 and 2015 as samples,and makes an empirical test on the influence of timing of financing marketization level on the stock pledge of the largest shareholder.And study found that,in terms of timing of financing,the largest shareholder will conduct stock pledge when the stock price were overvalued or it is time to execute easy monetary policy,additionally,the two timing can simultaneously exist but do not affect each other.As for the governance role of marketization level,we analysis it from two perspectives: thefinancial marketization level and the legalization level.The higher the marketization level is,the less the largest shareholders use stock pledge for financing.Joining the interaction item of marketization level and timing of financing,we found that the overvalued price of stock will weaken the negative influence of the marketization level on the largest shareholder's stock pledge.However,easy monetary policy affects little on the influence of marketization level on the stock pledge.In other words,overvalued price of stock weaken the governance effect of external marketization level.Finally,according to the conclusions of the study,the author puts forward some suggestions to the largest shareholders,the fund lenders and the regulators on how to promote the healthy development of stock pledge.