The Effect Of Equity Pledge By Controlling Shareholders On Corporate Social Responsibility

As a popular financing method,equity pledge has not been tested for a long time.But we still can see the strengths and weaknesses from its existing performance.With the same as all traditional financing methods,equity pledge has both advantages and disadvantages.The phenomenon of controlling shareholders using equity pledge to hollow out listed companies has warned people to beware of they using various means to encroach on other stakeholders.The corporate social responsibility is closely related with each stakeholder.It can not only bring the enterprise tangible resources,but also intangible value.For enterprises in heavily polluting industries,the burden of environmental responsibility makes the significance of social responsibility more prominent.Therefore,research on the behavior of key individuals in heavily polluting industries,which are called controlling shareholders is significant.Under the condition of they are in the pledge of their equity,exploring whether and how it will influence corporate to implement social responsibility is beneficial to prevent many stakeholders from being invaded and push the mutual development of enterprises and society.Through sorting relevant literature,this paper mainly focuses on private benefits of control theory and combines principal-agent theory,legitimacy theory and stakeholder theory,proposes hypotheses on how controlling shareholders’ equity pledge will affect corporate social responsibility and what factor will affect the process.By selecting the A-share listed companies in the heavy polluting industries released by He Xun from 2013 to 2020 as the research samples,this paper draws empirical conclusions as follows :(1)In the heavily polluting industries,equity pledge by controlling shareholders will reduce the willingness of corporate to fulfill social responsibilities;(2)Compared with state-owned heavily polluting enterprises,controlling shareholders’ equity pledge of non-state-owned heavily polluting enterprises has a more significant inhibiting effect in fulfilling social responsibilities;(3)Management ownership can reduce the negative effect of equity pledge by controlling shareholders on corporate social responsibility;(4)Internal control plays a part of mediating effect between equity pledge by controlling shareholders and corporate social responsibility.In order to study the fulfillment of social responsibility,which is the "adjustable expenditure" of enterprises,this paper further explores the individual behavior of equity pledge by controlling shareholders and its collateral effects in heavily polluting industries.At the same time,by introducing the moderating variable of management ownership,this paper provides a more definite scheme for safeguarding the rights and interests of stakeholders,which derives from corporate governance.Finally,through the acting path of internal control,this paper makes a more detailed study on the formation of the relationship between equity pledge by controlling shareholders and corporate social responsibility,which provides a specific direction for regulators to strengthen the supervision of equity pledge companies.