The Influence Of Equity Pledge On Enterprise Value Studied From The Perspective Of Enterprise Financialization

Under the background of world economic downturn,global growth slowdown,domestic social financing increase slowdown,and high corporate debt,the controlling shareholder implements equity pledge and allocates the raised funds to financial assets to improve the financialization level of enterprises out of the motivation of precautionary savings and to resist the uncertain risks in the future.On the other hand,the profit rate of traditional entity enterprises and the financial industry is gradually increasing.The controlling shareholders,motivated by speculation,take the initiative to use the funds raised from equity pledge to allocate financial assets with a long investment cycle for profit.In order to find out the impact of equity pledge on enterprise value,scholars have carried out extensive research.Existing studies separate the relationship between the three and analyze and discuss equity pledge and enterprise value,equity pledge and enterprise financialization respectively,but there is a lack of analysis linking the three.In order to understand the role of corporate financialization in the influence of equity pledge on corporate value,this paper carries out follow-up research.The fixed effect model and intermediary effect model are used in this study,and the proportion of equity pledge and relevant corporate financial data of all listed companies in Shanghai and Shenzhen from 2017 to 2021 in wind database are taken as samples.Firstly,the relationship between equity pledge and enterprise value is empirically studied by using the control Year(Year),industry(Ind)two-way fixed effect model.Further analysis,starting from the essence of enterprise ownership,the sample data is divided into state-owned enterprises and non-state-owned enterprises to investigate whether there is a difference between equity pledge and enterprise value.The mediating effect model is used to verify whether there is mediating effect in enterprise financialization.On this basis,financial assets are divided into short-term financial assets and long-term financial assets according to the different liquidity of financial assets.The financialization level of different types of enterprises is measured according to the proportion of different financial assets in the total assets.From the perspective of short-term financialization level and long-term financialization level of enterprises,this paper analyzes how equity pledge affects enterprise value through two ways of enterprise financialization.In the robustness test part,robustness processing is carried out for variables that may be omitted,and solution is carried out by replacing the model.Tobit model is used to replace the fixed effect model for testing,and Tobit model is used to replace the intermediary model for testing.Sobel test and Bootstrap test were used to further verify the existence of mediation effect.The endogeneity test was conducted by 2sls instrumental variable method.Research shows that(1)Equity pledge can significantly improve enterprise value.(2)Equity pledge in both state-owned enterprises and non-state-owned enterprises can enhance enterprise value,and non-state-owned enterprises have a more significant effect than state-owned enterprises.(3)Equity pledge improves the financialization level of enterprises,both short-term financialization level and long-term financialization level.(4)Equity pledge has a positive impact on enterprise value by allocating short-term financial assets and improving short-term financialization level.Equity pledge allocation of long-term financial assets to improve the level of long-term financialization will have a negative impact on enterprise value.At a moderate level of financialization,equity pledge has a positive impact on enterprise value,while excessive financialization has a negative impact.The above conclusions enrich the research on how equity pledge affects enterprise value.It provides a theoretical basis for the controlling shareholder to allocate financial assets with equity pledge funds.It is of practical significance to use financial assets to improve the support for real enterprises,promote the high-quality development of real economy and make finance better serve the real economy.Based on the research in this paper,the following suggestions are put forward:(1)Combine traditional mortgage financing with equity pledge to reduce shareholders’ additional pledged shares and avoid the risk of control transfer.(2)Improve the disclosure of equity pledge,track the flow of pledged funds,so that the pledged funds can better serve the development of entity enterprises.(3)The government takes advantage of the financial market to anchor the needs of real enterprises and provide customized financial products.Shareholders can use the pledged funds to allocate more diversified financial assets,resist external risks,and better play the "reservoir" effect of financial assets.(4)Enterprises should properly introduce institutional investors,broaden investment information channels,and scientifically allocate financial assets with pledged funds.