Equity Pledge Of Controlling Shareholder;Heterogeneity Of Institutional Investors And Financing Constraint

At present,China has entered the new normal of economic development.As an important force to promote the growth of the national economy,enterprises are generally faced with the problems of difficult and expensive financing.Although the country has continuously introduced various financing facilitation measures,financing constraints are still the "Achilles heel" that restricts the high-quality development of Chinese enterprises.Equity pledge is a common debt financing method,which is popular for its low cost,high efficiency,and maintaining control.The equity pledge behavior of the controlling shareholder has become the focus of academic research,and the equity pledge separates the control from the cash flow right,which intensifies the encroachment of the interests of the controlling shareholder.The existence of the "closing line" exposes the controlling shareholder to the risk of transfer of control,and in order to maintain control,the controlling shareholder has an incentive to carry out market value management to raise the stock price,worsening the second type of proxy conflict.So,will the above-mentioned behavior of the controlling shareholder have an impact on the financing constraints of the enterprise? Institutional investors with their capital scale and information advantages,has now become the backbone of China’s stock market,institutional investors as an external governance factor,usually rely on their information and professional advantages to make more rational investment decisions,and participate in corporate governance,supervision of management behavior,can effectively restrain some improper decisions of management.Due to their different nature and objectives,what impact will heterogeneous institutional investors have on equity pledging and the financing constraints on their companies?Therefore,this paper first explores the impact of equity pledge of controlling shareholders on corporate financing constraints,and then analyzes the differences between listed companies with different property rights based on the nature of property rights of listed companies,so as to continuously improve the corporate governance environment,give full play to the role of institutional investors,supervise the equity pledge behavior of controlling shareholders,alleviate corporate financing constraints,and stimulate the vitality of enterprise development.This paper selects China’s A-share listed enterprises from 2013 to 2021 as sample,and based on the principal-agent theory,information asymmetry theory,signal transmission theory and control right theory,puts forward the research hypothesis of this paper and constructs the corresponding empirical model,first of all,explores the impact of equity pledge of controlling shareholders on corporate financing constraints;Secondly,the regulatory role of heterogeneous institutional investors is fully considered from the stability and independence of institutional investors’ shareholding;From the perspective of property right nature,the paper further discusses the impact of equity pledge of controlling shareholders on corporate financing constraints under different property rights;Finally,this study alleviated the endogenous problem through the robustness test of the propensity-matching score method,the replacement of explanatory variables,and the lag of explanatory variables.The results show that:(1)the equity pledge of controlling shareholders aggravates the degree of enterprise financing constraints;(2)Stable and independent institutional investors can alleviate the degree of financing constraints of enterprises with equity pledge of controlling shareholders;(3)Compared with state-owned companies,the stock pledge of controlling shareholders has a greater impact on the financing constraints of non-state-owned companies.Based on this,this paper finally puts forward suggestions for relevant departments to improve China’s financial market environment by improving the relevant system of equity pledge,encouraging and guiding institutional investors to actively participate in corporate governance,and improving the internal governance mechanism of enterprises,and looks forward to the future development direction of relevant fields.The innovations of this article are as follows:(1)From the perspective of research,domestic and foreign studies on equity pledge of controlling shareholders mainly focus on the incentives and economic consequences of equity pledge.The existing research on the impact factors of financing constraints mainly include equity structure,information disclosure quality,financial market environment,etc.In addition,although some scholars have explored the influencing factors of financing constraints from the perspective of equity pledge of controlling shareholders,the current research is still less.This paper,based on the latest data of A-share listed companies in China from 2013 to 3021,and from the perspective of equity pledge,has conducted research on financing constraints of listed companies,which has enriched the research results in relevant fields,It provides theoretical support and basis for how to alleviate the financing constraints of enterprises in the national modernization construction.(2)In terms of research contents and methods,when studying the impact of equity pledge of controlling shareholders on financing constraints,most of the existing literatures regard institutional investors as a whole to study their impact on corporate governance and so on.In the market,institutional investors with different natures usually play different roles,so it is also of far-reaching significance to study the role of institutional investors’ heterogeneity between them.This paper introduces the pledge of controlling shareholders’ equity,institutional investors’ heterogeneity,and corporate financing constraints into the same model,takes institutional investors’ heterogeneity as the moderating variable,and analyzes the performance of different institutional investors more comprehensively from the perspectives of stability and independence,which is more scientific and practical reference value,providing evidence for further stimulating the market vitality of institutional investors.In addition,this paper also considers the impact of the nature of property rights,and provides ideas for enterprises with different property rights to deal with financing difficulties.