Monetary Policy,Equity Pledge And Market Reaction

With the continuous development of China's capital market,equity pledge has become a very common phenomenon.As the "normal" equity pledge in the capital market,its economic consequences have attracted more and more attention.Monetary policy is one of the commonly used economic ways for the government to carry out macro-control,and its changes have a profound impact on the main body of micro-enterprises.Equity pledge is a commonly used debt financing method for enterprises,which is also greatly affected by monetary policy.Monetary policies with different degrees of tightness have different effects on the market reaction after equity pledge.Therefore,this paper studies the market reaction of equity pledge;further,put the micro-economic behavior of equity pledge in the macro environment of monetary policy and study its market reaction.However,most of the research on the impact of equity pledge on the company focuses on the impact of equity pledge on company performance and the company'ss long-term value.They do not focus on the investors' judgment of equity pledge,nor do they study the market reaction of equity pledge under the economic background of monetary policy.The characteristics of this paper are as follows:(1)paying attention to the judgment of the capital market on the equity pledge;(2)add the monetary policy background to further study the market reaction after equity pledge under the circumstance of monetary policy tightening.Based on the agency theory,information asymmetry theory,signal transmission theory,financial accelerator theory and monetary policy transmission mechanism theory,this paper applies empirical research to build a model to analyze the research problems,and then puts forward the research hypothesis of this paper.The research findings of this paper are as follows:(1)equity pledge has a negative impact on market reaction;(2)in the period of monetary policy tightening,the negative impact of equity pledge on market reaction is more significant.By studying the change of stock price after equity pledge,this paper enriches the research on the economic consequences of equity pledge.On the other hand,it also provides a theoretical basis for the better application of equity pledge in the capital market.