Equity Pledge Of Controlling Shareholders And Loan Structure

Over the past few years,China's A-share market has shown the overwhelming phenomenon of stock pledge.Though known as a low-cost financing method,the behavior of stock pledge brings a series ofproblems,just like stock pledge defaults and forced liquidation.Equity pledge may stimulate the self-seeking behavior,the tunneling of large shareholders and performance manipulation,which may usurp on minor stockholders'interest,have a negative impact on the listed company and even do harm to the capital market.The large scale and high portion of stock pledge must arouse the vigilance of the public.More and more scholars in China have begun to pay attention to the big shareholders'behavior of equity pledge,but it is not enough.This paper focuses on the mechanism of the first shareholders',pledge behavior on the company's bank debt structure through empirical research methods.It is of practical significance to discuss whether the bank will regard the pledge of major shareholder's stock as a risk factor.First,based on the latest data,this paper will study the existing literature from the perspectives of equity pledge,bank credit and bank discritmination.Secondly,this paper describes the stock pledge status,in order to get a better understanding of the equity pledge behavior.Third,we put forward the hypotheses and design the research model.Based on the data from 2013 to 2017,this paper explores the relationship between the stock pledge of controlling shareholder and the bank loans of listed companies.Finally,we summarize the whole content,reflect on the inadequacies and propose some policy recommendations.The paper also puts forward some research directions that can be considered for further research.Through the research,this paper draws the following conclusions:(1)In the case of a company with controlling shareholder's stock pledge behavior,the term structure of bank loan will be shortened,that is to say,the proportion of long-term debt is lower.(2)For companies with equity pledge of controll:ing shareholder,the proportion of secured loans is higher.This conclusion is equally applicable to long-term loans and short-term loans.(3)Companies with different property rights will meet different credit strategies.The bank may avoid the default risk arouse from the pledge behavior of large shareholders by restricting the term structure of private enterprises,and adjust the guarantee structure of all enterprises.The innovation lies in that the paper classifies the bank loan structure through two dimensions,and provides a new perspective on the phenomenon of bank discrimination.The main shortcoming of this paper is that there is no in-depth discussion on the impact of the controlling shareholder's equity pledge ratio.This is also the direction that can be discussed in future research.