The Effect Of Controlling Shareholders’Equity Pledge On The Financialization Of Enterprises

In recent years,since the profit rate of the virtual economy represented by the financial industry is much higher than that of the real economy,attracting real enterprises to invest in financial assets,the financialization of real enterprises is becoming increasingly serious,The behaviour of major shareholders is an important factor affecting the financialisation of enterprises.After contributing to shareholdings,major shareholders often maximise their own interests by managing surpluses and making short-term gains by investing in financial assets.Although investment in financial assets brings excess short-term returns on capital to enterprises,it inevitably discourages investment in the actual main business of the enterprise,leading to the phenomenon of "scarcity de-realisation" in the economic environment.This article examines the impact of shareholder controlled equity pledge on corporate financing from the perspective of shareholder controlled equity pledge,which has certain practical and theoretical significance for preventing financial risks and promoting stable economic development.According to data published on the official website of the China Securities Depository and Clearing Corporation,as at the end of 2021,a total of 2,517 listed companies in Shanghai and Shenzhen A-shares had stock pledges remaining,accounting for 51.50%of all listed companies in Shanghai and Shenzhen A-shares,indicating the prevalence of stock pledges in the Chinese A-share market This suggests that stock pledges are prevalent in the Chinese A-share market.This paper uses the data of A-share non-financial listed companies in Shanghai and China from 2011-2021 as research samples,and combines literature research,theoretical analysis and empirical analysis to study the relationship between major shareholder bonds and corporate financing.This article first summarizes relevant domestic and foreign literature,proposes research hypotheses based on relevant theories,conducts empirical research on the relationship between shareholder participation obligations and corporate financing,and deeply analyzes the impact of different maturity dates on financial asset allocation,Review the regulatory role of capital controls in decentralization,and finally examine the impact of capital controls on company financing.The results of the empirical study show that:(1)Pledging of controlling shareholders’equity deepens the financialisation of enterprises,and the higher the pledge ratio,the higher the level of financialisation of enterprises.(2)Controlling shareholders who pledge their equity holdings are more inclined to invest in long-term financial assets,while reducing their investment in short-term financial assets.(3)Controlling shareholders who pledge their equity holdings prefer to invest in high-risk financial assets,while reducing their investment in low-risk financial assets.(4)The impact of controlling shareholder equity pledges on corporate financialisation can vary across degrees of equity checks and balances and in companies with two positions in one or two separate positions.A high degree of equity checks and balances will limit the impact of controlling shareholder equity pledges on corporate financialisation,and separation of two offices will enhance the impact of controlling shareholder equity pledges on corporate financialisation.(5)Controlling shareholder equity pledges affect financialisation through two transmission mechanisms:the effectiveness of internal control and financing constraints.The paper then conducts robustness tests through PSM propensity score matching,one-period lagging of explanatory variables,instrumental variables approach,measures of replacement explanatory variables and controlling for province fixed effects to ensure the robustness of the empirical findings,and finally puts forward corresponding policy recommendations for relevant subjects based on the findings.