Pledge Of Controlling Shareholders' Equity, Quality Of Accounting Information And Inefficient Investment

Under the emerging capital market in China,equity pledge has become one of the important financing methods for controlling shareholders.With the rapid growth of the scale of equity pledge,the risks of it gradually appear,and its impact on the capital market and micro-enterprises cannot be ignored.Equity pledge of controlling shareholders will lead to the separation of their control right and cash flow right,and will cause the risk of control right transfer.Agency conflicts and other issues caused by equity pledge of controlling shareholders may affect the controlling shareholders' choice of investment decisions of the listed companies,thereby affecting Investment efficiency of listed companies.As important public market information,accounting information is an important basis for investors to make investment decisions.High-quality accounting information can effectively reduce the degree of information asymmetry of listed companies and ease agency conflicts.Therefore,this paper studies the impact of controlling shareholders' equity pledge on inefficient investment,and further explores the regulating effect of accounting information quality on the relationship between controlling shareholders' equity pledge and inefficient investment,which enriches the research on the economic consequences of controlling shareholders' equity pledge,extends the research on the factors affecting the investment behavior of non-financial companies and provides a certain reference for controlling the adverse economic consequences of controlling shareholders' equity pledge and reducing the company's inefficient investment.Firstly,this paper sorts out and reviews relevant research status.Based on the principal-agent theory,the information asymmetry theory and the signal transmission theory,this paper clarifies the influence mechanism of controlling shareholders' equity pledge on inefficient investment and puts forward corresponding assumptions.According to the existing literature,this paper measures the quality of accounting information from the content level and disclosure level,namely,accounting conservatism and the quality of information disclosure,and studies the regulating effect of accounting information quality on the relationship between controlling shareholders' equity pledge and inefficient investment.Secondly,this paper takes Shanghai-Shenzhen A-share listed companies from 2009 to 2018 as a sample,calculates the inefficient investment level of listed companies by constructing investment expectation models,and further divides the sample into two groups: overinvestment and underinvestment.Corresponding basic model and moderating effect model are used for empirical research using group regression or hierarchical regression.The study found that:(1)After the controlling shareholders' equity pledge,there will be problems such as aggravating agency conflicts and the degree of information asymmetry,which will increase the inefficient investment of listed companies;(2)The controlling shareholders' equity pledge will weaken the supervision of the management causing blind Expansion and lead controlling shareholders to seek new growth points for companies to increase stock prices by overinvesting,thereby exacerbating the over-investment of listed companies and reducing the under-investment;(3)The improvement of accounting conservatism,which represents the improvement of the quality of accounting information content and indicates that the company will timely record the loss,can restrain the improper behaviors of controlling shareholders and management,and reduce the inefficient investment and excessive investment caused by the pledge of controlling shareholders' equity,but also make the investment too conservative and aggravate the insufficient investment.(4)The quality of information disclosure,which measures the quality of accounting information from the level of disclosure,can more directly affect the information acquired by investors.The higher the quality of information disclosure,the less likely it is for listed companies with controlling shareholders' pledge to invest inefficiently,overinvest and underinvest.Finally,based on the results of empirical analysis,this paper puts forward relevant policy suggestions from policy makers,listed companies and investors,such as focusing on the behavior of controlling shareholders with equity pledges,weakening control rights of controlling shareholder equity pledges,strengthening listed companies Internal governance and perfecting the relevant systems of the accounting information preparation and disclosure,etc.This paper has great reference significance for policy makers to improve laws and regulations related to equity pledge and accounting information system,for listed companies with controlling shareholders' equity pledge to develop reasonable internal supervision mechanism and improve the quality of accounting information,and for investors to reasonably judge the investment efficiency of enterprises.