Study On Inefficient Investment Behavior And Consequences Of Controlling Shareholder’s Equity Pledge

In 2015,the central government proposed the policy of "three cancellations,one reduction,and one subsidy",which made financing difficult for enterprises,and many enterprises began to increase equity pledge financing.However,in recent years,my country has paid more and more attention to the risks brought by equity pledge.Among them,Article 9 proposes to actively and prudently prevent the risk of equity pledge of listed companies.With the centralization of the ownership structure of private enterprises in my country,the restrictions on the capital commitment of major shareholders are relatively loose,and the enterprise risk of enterprises is also increasing.In short,the issue discussed in this document is what will happen to the investment behavior of the company after the controlling shareholder signs the equity agreement,and what will be the economic impact.Now,many scholars have discussed in detail the motivation of equity pledge and its economic impact.However,most of the research to date has been empirical,with few instances of companies making investments after setting equity pledges.The study of behavioral change.Therefore,this paper selects Huayi Brothers as a case company,and comprehensively examines the changes and impacts of inefficient investment behavior after the company’s IPO through the case study method,and proposes corresponding countermeasures.Based on this,the author believes that.(1)After the capital agreement of the controlling shareholder,the company will invest its capital into emerging industries.If the investment fails,it will lead to a lot of inefficient investment.(2)After the controlling shareholder commits to make capital contributions,the degree of separation of the two rights will increase,and the risk of equity transfer will increase.Therefore,the major shareholder is more inclined to engage in investment activities that are beneficial to their own interests.(3)The shareholding commitment of the controlling shareholder has a significant impact on the company’s business.In order to reduce losses from stock commitments to companies,the following proposals are proposed.(1)At the company level,an equity verification and balance mechanism should be established and improved,and internal communication within the company should be strengthened.Monitor long-term equity investment commitment ratios.(3)At the level of investors,attention should be paid to the proportion of equity pledges,and should pay close attention to the dynamics of enterprises and the policies of the investment community..Through the analysis of this paper,it is beneficial for entrepreneurs to maintain a cautious attitude when making investment decisions,which helps to alert investors to changes in corporate investment behavior and regulators to strengthen equity commitment financing;And,reduce the hollowing behavior of enterprises..