Controlling Shareholders' Equity Pledge And Earnings Management

Since 2013,the development of equity pledge has been rapid,which has set off a wave of pledge in the capital market.Even almost all companies have experienced equity pledge.Although the enthusiasm for the pledge of equity has been suppressed after the introduction of the new regulations on equity pledge,the problems in the pledge of equity have not completely resolved,and the pledge system of the equity still needs to be further improved.Previous scholars' research on equity pledges is mostly based on the internal perspective of listed companies,considering the economic consequences of equity pledges for listed companies.But this article is based on the external Pledgee of listed companies,consider the game between thepledgee and the controlling shareholders of listed companies to study the governance effect of the external pledgee in the controlling shareholder pledge.At the same time,this paper considers the difference between different types of pledgee,and the difference between the restricted shares and the non-restricted shares as the pledge target,and conducts a more in-depth study of the role played by the pledgee.Based on the data from 2013 to 2017,this paper empirically analyses the pledge of controlling shareholders and the non-pledged shares of controlling shareholders,the pledgee of the controlling shareholder is securities company and the pledgee of the controlling shareholder is other party,and the pledged shares of controlling shareholders are restricted shares and the pledged shares are non-restricted shares.The non-restricted shares were analyzed empirically.The research results show that(1)The earnings management level of the company with pledge is higher than that of the company without pledge.In the game between the controlling shareholder and the pledgee,the pledgee's effect of governance is weaker than the controlling shareholders' whitewashing and packaging of equity;(2)affected by more conflicts of interest and their own risk awareness,when the securities company is a pledgee,the earnings management level of listed companies is higher;(3)the pledgee's corporate governance effect on the listed companies pledged by restricted shares is worse than that of the companies pledged by non-restricted shares.In the game between pledgee and restricted shareholders,the pledgee is in a weak position.The main innovation of this paper is to consider the different types of pledge and restricted shares in the equity pledge.The main shortcoming of this paper is that it does not stand and think deeply about the investment of funds from the perspective of the pledgee.This is the direction worth studying in the future.