Research On The Influence Of Controlling Shareholder’s Share-Pledging On Enterprise Financial Flexibility

Financial flexibility is the ability of enterprises to fully respond to unexpected business challenges or investment opportunities by flexibly adjusting cash flow or timely borrowing.It has become a key resource for the survival and development of enterprises in the economic downturn cycle.The personal financing pledge of controlling shareholders may have a joint impact on the financial resources of holding enterprises and affect the sustainable operation ability of enterprises.Under the economic policy background of "deleveraging and risk prevention",enterprises,as the main body of market economy,should take the initiative to take the responsibility of preventing the risk of share-pledging and reducing enterprise leverage,and build their core competitiveness through reserve financial flexibility.Based on the above background,this paper studies the impact of controlling shareholders’ share-pledging on corporate financial flexibility.In addition,in the context of the deep integration of the Internet and the real economy,public opinion attention has become an important external regulatory variable of corporate governance.This paper will also take public opinion attention as the starting point to study the regulatory impact of public opinion attention on the relationship between controlling shareholders’ share-pledging and corporate financial flexibility.By combing the relevant research literature at home and abroad,and taking the principal-agent theory,information asymmetry theory and capital structure theory as the theoretical support,this paper constructs the theoretical framework of controlling shareholder share-pledging affecting enterprise financial flexibility,and carries out empirical test and case study.Firstly,this paper selects the data of China’s A-share listed companies from 2013 to 2020 for empirical research.The results show that:(1)the level of financial flexibility of enterprises with controlling shareholders’ share-pledging is significantly lower,and the higher the pledge proportion,the lower the level of financial flexibility;(2)Public attention focuses on the regulatory effect between the controlling shareholder’s share-pledging and the enterprise’s financial flexibility,which inhibits the controlling shareholder’s share-pledging behavior and the reduction of the pledge degree on the enterprise’s financial flexibility.Secondly,this paper also takes the nature of controlling shareholders and the nature of enterprise ownership structure as the starting point for further research.The results show that:(1)when the controlling shareholder is a natural person,the share-pledging behavior and pledge degree of controlling shareholders have a more obvious effect on the reduction of enterprise financial flexibility;(2)When the controlling shareholder is the founder of the enterprise,the share-pledging behavior and the degree of pledge of the controlling shareholder have a more obvious effect on the reduction of the financial flexibility of the enterprise;(3)The controlling shareholder’s share-pledging of state-owned enterprises has a weaker effect on the reduction of financial flexibility.Then,this paper selects Suning group to carry out a case study.On the one hand,it verifies the empirical results,on the other hand,it clarifies the practical mechanism of controlling shareholders affecting corporate financial flexibility.This paper makes some contributions to expand the research on the economic consequences of controlling shareholders’ share-pledging and the influencing factors of financial flexibility,and the research conclusions provide some suggestions for market policy makers,investors and enterprise managers:(1)Market policy makers need to strictly supervise the disclosure of share-pledging information,strengthen the moral review of share-pledging,and actively guide a good market operating environment;(2)Investors should be alert to the investment risks behind the share-pledging of controlling shareholders,actively obtain decision-making support information and enhance their own judgment;(3)Enterprise managers should improve the ability of corporate governance,improve the ability of enterprises to respond to public opinion events,and reserve the financial flexibility of enterprises.