Controlling Shareholders' Share Pledge And The Share Repurchase Of Listed Companies In Open Market

Since 2018,with the increasing downward pressure of share price,the risk of share pledge of listed companies has attracted extensive attention in the capital market.At the same time,listed companies in China frequently buy back large-scale shares,and the number of listed companies that disclose the plan of share repurchase in open market is far higher than that in previous years.Based on the background of stock price in 2018,this paper considers that the reason for the explosion of share repurchase may be related to the risk of share pledge.This paper takes all listed companies as sample,selects the quarterly data for the whole year of 2018,and uses empirical research methods to explore whether the share repurchase conducted by China's listed companies is related to the controlling shareholders' share pledge.The empirical results show that:(1)The higher the proportion of controlling shareholders pledge their shares,the more likely the listed company is to carry out share repurchase in open market;(2)For listed companies that have disclosed repurchase plan,high pledge companies will repurchase more shares;(3)The higher proportion of shares held by institu tional investor,the stronger the positive correlation between high share pledge and the possibility of share repurchase;(4)The higher proportion of shares held by controlling shareholder,the stronger the positive correlation between high share pledge and the possibility of share repurchase.Moreover,this paper finds that the listed company's disclosure of share repurchase plan can raise the stock price,further verifying that the controlling shareholder may manipulate the listed company to carry out share repurchase and avoid pledge closing.