| Equity pledges are a common phenomenon in the A-share market,and therefore the impact of equity pledges,especially the economic consequences arising from controlling shareholders’ equity pledges,remains a hot topic of research.Meanwhile,since the promulgation of the "Guidance on the Pilot Implementation of Employee Stock Ownership Plans for Listed Companies" in 2014,the number of companies implementing employee stock ownership plans has gradually increased,and the motivation and impact of employee stock ownership plans have gradually become a hot topic.Generally speaking,employee stock ownership plans are considered as a means to motivate employees and enhance their work efficiency,however,existing studies have found that employee stock ownership plans can cause a positive market reaction and thus can play a role in regulating share prices and mitigating the risk of share price collapse.So,what is the impact of controlling shareholders’ equity pledges on employee stock ownership plans?This paper uses a sample of 19,983 firm-annual observations of A-share listed companies from 2014-2021 as the study population and applies a Logistics model to examine the effect of controlling shareholder equity pledges on the probability of employee stock ownership plan launch.Then the moderating effects of control transfer risk,controlling shareholders’ shareholding ratio and equity checks and balances are explored separately.Finally,the impact of employee stock ownership plan launched and implemented in the context of controlling shareholder’s equity pledge on the value of the company is investigated.The paper draws the following conclusions:(1)listed companies with controlling shareholders’ equity pledges at the end of the year are more likely to launch employee stock ownership plans than companies without controlling shareholders’ equity pledges;(2)listed companies with higher controlling shareholders’ equity pledges are more likely to launch employee stock ownership plans;(3)the risk of control transfer has a moderating effect on the impact of controlling shareholder’s equity pledge on employee stock ownership plan,specifically,listed companies with high controlling shareholder’s equity pledge ratio have more incentive to launch employee stock ownership plan when facing the risk of share price decline;(4)companies with high controlling shareholder’s equity ratio and low equity checks and balances are more likely to launch employee stock ownership plan after controlling shareholder’s equity pledge;(5)employee stock ownership plan implemented in the context of controlling shareholder’s equity pledge has a positive impact on company performance in the short term,and has a positive impact on company performance in the long term.positive impact on company performance in the short term and negative impact on company value in the long term. |
