| Stock pledge refers to the behavior of shareholders who use their shares as pledges to raise funds from finance banks,brokers,trusts and other financial institutions.Stock pledge becomes popular since the restricted shares can also be used for stock pledge and the stock pledge does not affect the control rights of shareholders.Especially since the official launch of the pledge repurchase business in 2013,the amount of stock pledge of controlling shareholders has risen sharply.But the stock pledge will bring great risks.When the stock price falls,the controlling shareholder may be required to replenish the collateral,or may even be forced to transfer control.Especially because of the current economic downturn as well as stock market downturn,the stock pledge has become a “mine” in the capital market.Many listed company shareholders are facing the risk of liquidation due to falling stock prices.The controlling shareholder’s stock pledge has gradually become a key issue for investors and academic circles.In China,the controlling shareholder has very strong ability to influence the business decision-making.Will the separation of the cash flow rights between control rights increase the controlling shareholder’s business intension for the pursuit of private interests because of stock pledge? Working capital management decision-making is one of the three major financial decisions in the daily decisionmaking process.The adjustment cost of working capital is low,and the liquidity of it is strong.So working capital is extremely vulnerable to managers.Then will the controlling shareholder stock pledge affect the business operation policy? How will it affect corporate working capital management policies? The purpose of this paper is to further understand the economic consequences of stock pledge by answering these questions.The main contents of this article are as follows:The first chapter is the introduction.Firstly,the background of the topic is introduced.Secondly,the problems that needed to be studied are put forward,and the research significance and research methods are also introduced.The structure of the paper and the innovation are described.The second chapter is a literature review.This paper reviews the domestic and foreign literature from two aspects of controlling shareholder pledge and working capital management.First,The literature reviews on the pledge of controlling shareholders’ stock are mainly from Taiwan and mainland China.The perspectives of pledge motivation,economic consequences and associated phenomena are reviewed.Second,this paper reviews the literature of working capital management.Research on the definition of working capital by domestic and foreign scholars,as well as research on the composition and type of working capital is included.Third,this paper reviews the factors influencing working capital from the micro-company level,the meso-level industry level,and the macro-economic level.The third chapter is the institutional background and theoretical assumptions.Firstly,the paper introduces the history and institutional background of the development of stock pledge business in China.Secondly,it introduces the definition and classification of working capital investment policies,working capital financing policies,and working capital comprehensive policies.Thirdly,based on the research questions and theoretical analysis,the hypotheses of this paper are put forward,which is as follows:(1)The controlling shareholder’s stock pledge rate is positively related to the working capital investment policy aggressiveness;(2)The correlation between controlling shareholder’s stock pledge rate and working capital investment aggressiveness in state-owned company is stronger;(3)The higher the controlling shareholders pledge,the more they inclined to use the cash to influence the working capital investment policy;(4)The controlling shareholder’s stock pledge rate is negatively related to the working capital financing policy aggressiveness;(5)The negative correlation between the stock pledge rate of nonstate-controlled shareholders and the aggressive process of working capital financing policy is stronger;(6)The controlling shareholder pledge will affect working capital through short-term borrowing indicators and payables indicators.The fourth chapter is the methodology.This paper selects the listed manufacturing companies in Shanghai and Shenzhen stock markets from 2008 to 2017 as the samples.The stock pledge rate of the controlling shareholders at the end of the year is used as an explanatory variable.And the paper use the scale of enterprises,growth,investment in fixed assets,capital expenditure,pre-tax profit,business cycle,market-to-book ratio,GDP growth rate,M2 year-on-year growth rate and other indicators as control variables.And four multiple regression models are established.The fifth chapter is the empirical results and analysis.The article uses EXCEL and STATA14.0 software to describe the sample,do correlation analysis,and do multiple regression analysis and robustness test.The research results show that there is a significant correlation between the controlling shareholder’s stock pledge rate and the aggressiveness of working capital investment and financing policy.And the research results are basically consistent with the hypotheses proposed in this paper.Also,the robustness test is passed.The sixth chapter is the research conclusions and prospects.Firstly,the results of the previous empirical tests are summarized.Secondly,the research conclusions have gained some inspirations:(1)The degree of separation of cash flow rights and control rights has increased,which has aggravated the motive of the controlling shareholder “tunneling”.It is suggested that Chinese government should restrict the control rights of controlling shareholders who have high stock pledge rates.(2)Strengthen the disclosure management of stock pledge,reduce the degree of information asymmetry between enterprises and the outside world,and help investors make rational judgments;(3)Improve corporate governance structure and restrict the self-interested behavior of controlling shareholders.Finally,the article introduces the limitations and future prospects of the research on data acquisition,variable selection and research ideas.Compared with the previous study,the contribution and innovation of this paper is to enrich the existing research on stock pledge and working capital management.(1)Content innovation.Some scholars have studied the influence of controlling shareholders’ stock pledge on innovation investment,tax avoidance,earnings management,etc.This paper studies the influence of controlling shareholder pledge rate on short-term financial policy;(2)Research perspective innovation.As one of the three major decisions of the company’s finance,working capital affects the daily operation efficiency of the company.In the past,the research on the factors affecting the management of working capital mainly focused on the macro external environment and the endogenous factors of the enterprise.And the amount of study of the influence of the controlling shareholders’ stock pledge on working capital policy is less.(3)Research method innovation.At present,most of the research on the factors affecting the working capital management of listed companies in China only show the impact results,and do not study the impact path.This paper studies how the controlling shareholders’ stock pledge affects current assets and current liabilities. |
PDF Full Text Request