Study On The Relationship Between The Pledge Of Major Shareholders’ Equity And The Risk Of Stock Price Collapse

Equity pledge is a kind of market tool with compliance,which is widely used by listed companies in China.It not only brings financing convenience,but also may cause potential risks and threats,which has become an important driving force behind the stock price crash.At the same time,institutional investors are generally regarded as an important force in the market stability mechanism and effective external supervisors of listed companies.All parties in the market also expect institutional investors to take a positive role in the governance of listed companies.Based on the above facts,we would like to further clarify the following questions: does equity pledge really increase the risk of stock price crash?In this process,whether the institutional investor is a qualified outside investor who can play a positive regulating effect,thus easing the relationship between the pledge of major shareholders’ equity and the risk of the company’s stock price collapse? Furthermore,there are many types of institutional investors.Is there heterogeneity in the regulatory effect of different types of institutional investors? The answers to these questions have direct application value for the normative development of the equity pledge business,the improvement of the corporate governance mechanism and the full play of the role of institutional investors.Based on this,this paper takes listed companies from 2010 to 2018,A-share market data as the foundation,with the combination of theoretical analysis and empirical analysis methods,establish A panel regression model to empirical research of the above issues,the results show that the big shareholders equity pledge will significantly improve the listed company stock price crash risk,and the higher the proportion of equity pledge,the greater the risk that the company’s share price collapse.In general,the regulation mechanism between institutional investors’ stock ownership and the risk of stock price collapse of major shareholders is not effective.In other words,institutional investors are not qualified external supervisors,but will further increase the information asymmetry and principal-agent costs brought by stock ownership pledge,thus further increasing the risk of stock price collapse.Specifically,there are differences between independent institutional investors and non-independent institutional investors.The latter will further aggravate the relationship between the pledge of major shareholders’ equity and the risk of stock price collapse,while independent institutional investors can show a weak positive regulatory effect,indicating that the effectiveness of their governance mechanism needs to be further explored and improved.Finally,based on the conclusions of empirical analysis,this paper gives corresponding policy suggestions to investors,listed companies and policy makers respectively,including suggestions on the construction of specific implementation rules of equity pledge of listed companies,the construction of external supervision mechanism of the market,and active information disclosure.