| According to the 20 th National Congress,high-quality development requires strengthening innovation and technological progress,improving the quality and value-added of products and services.The intensity of investment in technological innovation is an important indicator for measuring regional innovation capability.In the current supply-side structural reform,enterprises must enhance their innovation capabilities to improve total factor productivity,increase R&D investment,and enhance market competitiveness.However,due to the long return cycle and high risks associated with technology innovation investment,enterprise managers often avoid this issue,and equity pledge with lower cost advantages is an ideal choice.In equity pledge,if the equity price fluctuates with the market and falls below the pledge warning line,and the controlling shareholder is unable to add margin,they will face the risk of losing control of the company.To prevent the transfer of control,shareholders may reduce technology innovation investment.This way,they can ensure their own voice in the enterprise.Therefore,the innovation enthusiasm of listed companies on the GEM(the Growth Enterprise Board)is not high.This article focuses on the research of listed companies on the GEM(the Growth Enterprise Board)in China,and explores the relationship between controlling shareholder equity pledge and enterprise technological innovation investment through empirical analysis.By studying and integrating domestic and foreign literature,relevant theories such as agency delegation and private control rights are applied to propose hypotheses on the relationship between equity pledge and technological innovation investment of listed companies on the GEM(the Growth Enterprise Board).Using an empirical model,conduct panel data regression on listed companies’ financial data from the past six years in GEM(the Growth Enterprise Board)to determine the actual relationship between the two variables,and the efficiency of equity incentives in different enterprises was compared from the perspectives of property rights attributes,regional heterogeneity,and industrial heterogeneity.The study found that:(1)Equity pledge by controlling shareholders harms a company’s investment in technology innovation.(2)Equity incentive measures can effectively reduce the negative effect of equity pledge on technological innovation investment.Therefore,effective equity incentive plans can be adopted to suppress the agency conflict caused by equity pledge and ensure the smooth development of technological innovation investment.(3)The inhibitory effect of equity incentives on the negative effect of equity pledge is more significant in non-state-owned listed companies than in state-owned listed companies.(4)The inhibitory effect of equity incentives on the negative effect of equity pledge is more significant in the eastern and central regions of China than in the western region.(5)Equity incentive measures are more effective in suppressing the negative effect of equity pledge in non-manufacturing enterprises than in manufacturing enterprises.Finally,the article conducted robustness tests on various dimensions.Based on this,four suggestions are proposed:(1)standardize the stock pledge rating mechanism to prevent non-performing assets from entering the capital market;(2)smooth the information disclosure mechanism of listed companies to reduce the cost of entrusted agency;(3)diversify corporate financing methods;and(4)increase attention to companies with outstanding equity incentive effects(non-state-owned,non-manufacturing,and central and eastern enterprises). |
