The Controlling Shareholder Equity Pledge,Ownership Structure And Corporate Value

With the unique advantage of "changing shares to capital" without affecting control rights,equity pledge has become an increasingly important and more universal financing method in China's capital market.With the continuous expansion of the scale of equity pledge,it has a significant impact on the listed companies themselves,the investors in the secondary market and the volatility of the capital market.Equity pledge not only broadens the financing channels of companies which facing strict financing constraints,but also breaks the balance between risk and interest of controlling shareholders.Although the pledge of controlling shareholders' equity is only their individual financing behavior,due to the particularity of the position of controlling shareholders,combined with the immature capital market in China and the corresponding lack of regulatory background,it is likely to produce a series of economic consequences through the multi-dimensional mechanism of action.When the controlling shareholders have a strong control force in the major business decision-making process of the company,and the conflicts between their own interests and the minority shareholders become increasingly intensified,the controlling shareholders have a strong incentive to tunneling the listed company to maximize their control rights.When the company's stock price falls to the closed position,it is very likely to cause control of the company changes,which is not conducive to the continuity of the company's strategy and the robustness of business management,and has a significant negative effect on the company's value.This paper studies on the one hand is advantageous to the abundant research literature about equity pledge in our country,on the other hand,to improve the system of equity pledge related regulations to promote the standardization of the controlling shareholder equity pledge,avoid the occurrence of the capital market systemic risk,protect the interests of the pledgee and the medium and small investors have practical significance.In this paper,the equity pledge data of a-share listed companies from 2011 to2017,the corresponding financial data and the indicators representing the equity structure are selected as the research samples.Starting from the equity pledge behavior of controlling shareholders,the influence of this behavior on the company's value is studied,and the intermediate effect of the equity structure on the influencing mechanism is considered.Through empirical research,this paper finds that :(1)the pledge behavior of controlling shareholders will have a negative impact on the value of the company;(2)the higher the proportion of the number of shares pledged by the controlling shareholder in the total number of shares held by the controlling shareholder,the higher the equity pledge rate,and the more significant the corresponding negative impact on the value of the company;(3)the regression of the model with two explanatory variables representing the ownership structure shows that when the ownership concentration is higher and the ownership balance is lower,the negative effect of the financing behavior of the controlling shareholder's equity pledge on the company value will be further strengthened.The following enlightenment can be obtained from the research conclusions of this paper :(1)the rationalization of the company's equity structure has a significant positive effect on the protection of the company's value and the legitimate rights and interests of stakeholders in the context of equity pledge;(2)investors should pay more attention to the personal economic behaviors of the controlling shareholders to prevent large investment losses;(3)with the continuous adjustment and standardization of the relevant system of equity pledge,equity pledge financing is expected to become a sharp tool for the rapid financing of the company and a long-term driving force for the company's value improvement.