| In 2005,my country carried out the reform of the share structure system,which solved the problem that state-owned shares,legal person shares and other shares in the development of my country’s capital market could not be circulated in the secondary market.Since then,state-owned shares and legal person shares can be easily circulated in the secondary market.The reform of the split system has laid the institutional foundation for the rise of the equity pledge market.With the development of the equity pledge market,the Shenzhen Stock Exchange and the Shanghai Stock Exchange have successively issued laws and regulations related to the registration and settlement of equity pledges.In the context of the rapid development of the equity pledge market,equity pledges are very common among controlling shareholders.Through literature research,it is found that equity pledge will lead to a series of economic consequences,and it is found that companies with equity pledge,especially companies with a high equity pledge ratio,may have two situations: 1.The company may experience a short-term rapid decline in stock price,leading to shareholders The financial risk of having to add margin or collateral;2.The controlling shareholder cannot provide supplementary collateral in time and the forced liquidation will result in the loss of control or ownership of the controlling shareholder.By studying the previous literature and observing the actual phenomenon of equity pledge,it is found that the shareholders who carry out the equity pledge are generally the shareholders who hold a larger share of the company’s equity.Further research finds that it is the controlling shareholder of the company that will have a greater economic impact on the company.Therefore,this paper Taking the controlling shareholder’s equity pledge as the research object.This paper takes the controlling shareholder’s equity pledge motive as the starting point of the research,and finds that the motive of equity pledge is mainly the following three points: 1.The motive of financing;2.The motive of interest encroachment;3.The motive of maintaining control.The data in this paper uses the financial data,equity pledge,and stock price volatility related data of my country’s listed companies from2006 to 2020.Based on the above data,we study the impact of controlling shareholder’s equity pledge on stock price volatility,and take corporate innovation as a research perspective to study its mediating effect.Through theoretical research,this paper finds that joint-stock companies have serious agency problems(including the first type of agency problem and the second type of agency problem).The second type of agency problem refers to the income of the controlling shareholder of the company in excess of his share of stock holdings-having control rights that other minority shareholders do not have.In the research hypothesis of this paper,the controlling shareholder has control and can pledge equity at any time,and is subject to less internal supervision and restrictions.This makes it easy to trigger moral hazard and adverse selection of the controlling shareholder,hollowing out the company at a lower cost and encroaching on the interests of other shareholders.Through the research of literature,it is found that after the disclosure of the information of the controlling shareholder’s equity pledge,the market investors’ concerns about the controlling shareholder’s equity pledge are caused by the information asymmetry theory and the signal transmission theory,which makes the company’s stock price more volatile.In the follow-up research,in order to deepen the research on the impact of controlling shareholder’s equity pledge on stock price volatility,the mediator variable of corporate innovation is included in the analysis from many research perspectives.It is found that the controlling shareholder is worried about the risk of transfer of control after the equity pledge.In order to maintain and protect the control of the company and prevent the equity pledgee from losing control of the closed stock due to the rapid decline of the stock price,the controlling shareholder may make a series of measures,such as earnings management,company market value management,and reducing unnecessary cash expenditures for the company.Among them,the company’s R&D investment is also classified as unnecessary cash expenditure by the company’s controlling shareholders.The reduction of the company’s R&D investment affects the company’s innovation efficiency,and the weakening of the company’s innovation capability leads to the increased volatility of the company’s stock price.Through literature review and theoretical analysis,this paper finds two specific influence paths of the intermediary effect: 1.The increase in the equity pledge rate of the controlling shareholder makes the controlling shareholder actively take measures to maintain control.One of the measures is that the controlling shareholder reduces cash in order to maintain control.Expenditures and reduce the company’s investment in innovation.2.Reducing the company’s R&D investment leads to a decrease in the company’s innovation efficiency,resulting in increased stock price volatility,and corporate innovation plays a role as an intermediary variable.This study draws the following three conclusions:1.Under the same other conditions,the equity pledge of the controlling shareholder will aggravate the volatility of the company’s stock price;different equity properties will have different impacts on the company,and the equity pledge of the controlling shareholder of a state-owned enterprise will affect the company’s stock price volatility is greater than that of non-state-owned enterprises..2.Under the same conditions as other conditions,the company has pledged the controlling shareholder’s equity during the year,which will significantly reduce innovation indicators such as R&D investment and innovation efficiency.3.Under the same other conditions,the reduction of the company’s innovation level will increase the volatility of the stock price and the risk of stock price crash.The theoretical research significance of this paper is to supplement the various economic consequences caused by the controlling shareholder’s equity pledge,and to increase the understanding of the factors affecting stock price volatility.The practical significance or application significance of this paper is to help many investors in the secondary market to make decisions,to avoid the weakening of the function of stock market resource allocation and possible systemic risks in the stock market;to give corresponding opinions and suggestions to regulators,companies and market investors.The last part of this paper is to put forward corresponding policy suggestions: 1.The company should control the equity pledge ratio according to its own actual situation,and at the same time strengthen the publicity of equity pledge information to reduce information asymmetry.The company strengthens the governance of internal management rights and ownership of the enterprise,and does a good job in risk management and control.2.Relevant departments should improve the laws and regulations on equity pledge,pay more attention and strengthen supervision-for companies and shareholders with blacklists in the securities market,their equity pledge behavior should be strictly restricted.3.At the same time,at the social level,investment and financing channels should be continued to be relaxed to create a relaxed and harmonious financial market environment.4.For company innovation,pay more attention to innovation efficiency;improve the company’s talent training system and innovative R&D system to improve innovation efficiency;5.Improve entrepreneurial responsibility-the controlling shareholder should pledge equity for the purpose of long-term development of the company to reduce the stock price volatility,increasing a company’s long-term stock yield. |
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