The Impact Of Share Pledge On Enterprise Innovation

Under the background of the economic take-off in the 21 st century,our country’s economic development model has undergone a transformation from quantitative change to qualitative change.In order to ensure my country’s international status and the advantages of a big country,the growth,maturity and expansion of Chinese enterprises all pay attention to the driving force of innovation and internal vitality.This is because innovation is the source of power for development and the cornerstone of an enterprise’s foothold in domestic and foreign markets.Enterprises operate according to their unique life cycle.If they want to reform and transform from the recession period,or achieve stable development from the growth period,they all need the support of technological innovation.However,innovation is not easy.The development and research of intangible assets has a long lead period and uncertainty.If an enterprise wants to obtain beneficial results in innovation activities,it needs to invest a lot of money,which will affect the survival of the enterprise.Operation and development bring certain risks.When the amount of financing from the internal surplus cannot meet the needs of innovation funds,the company will obtain funds from the outside.Equity pledge came into being.As a form of external financing,equity pledge is favored by major shareholders because of its flexibility,convenience and speed.Since the financing model of equity pledge is allowed in my country,funds and resources have been reasonably utilized and allocated in the capital market,which alleviates the financing problems of enterprises to a certain extent.However,equity pledge will weaken the controlling shareholder’s control over the enterprise,reduce the vitality and impetus of enterprise innovation,and increase enterprise risk,the stock price will fall,and even face the risk of stock price collapse,which will adversely affect the capital market.Furthermore,due to the different characteristics,thinking,and ways of dealing with problems of executives,they will all have a certain impact on equity pledge and corporate innovation.Therefore,from the micro level of corporate governance,analyzing the influence mechanism between senior managers and equity pledge and corporate innovation investment will have a profound impact on the future creativity and stable development of the company.This paper focuses on the mechanism and transmission mechanism between equity pledge and enterprise innovation.It is proposed to collect panel data of 1,719 A-share listed companies in my country from 2013 to 2019,and empirically analyze the interaction between equity pledge,corporate innovation investment,financing constraints,and executive heterogeneity.symbiotic mechanism.The research results show that: equity pledge will weaken the level of enterprise innovation investment;financing constraints build a bridge between equity pledge and enterprise innovation investment,form a transmission mechanism,and play a complete intermediary role,that is,equity pledge will cause the decline of enterprise financing ability.,the degree of financing constraints is deepened,and the innovation investment of enterprises is reduced,thereby inhibiting the innovation ability and vitality of enterprises;the heterogeneity of executives’ physiological characteristics,tasks,and sources has a positive moderating effect,which will aggravate the inhibitory effect of financing constraints on R&D.When returning to different regions,the shareholder pledge behavior of enterprises in the eastern and central regions will reduce their investment in innovation;the financing constraints in the eastern and central regions play a complete intermediary role,and the western region is not significant.The moderating effects of executive heterogeneity vary.When the nature of divided property rights returns,the equity pledge of state-owned enterprises is not conducive to corporate innovation activities;financing constraints play a complete intermediary role,and the heterogeneity of executives has a positive moderating effect.However,when the company is non-state-controlled,the effect of equity pledge on corporate innovation investment is no longer significant.At the same time,in order to make the research conclusions more reasonable,this paper conducts a robustness test.This study suggests that companies should rationally use equity pledge for financing,and integrate and utilize executive heterogeneity to promote corporate innovation.