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The Influence of Large Shareholders’ Equity Pledge on the Corporate Risk-Taking and Performance

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DOI: 10.4236/jssm.2019.123031    135 Downloads   234 Views
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ABSTRACT

With the continuous development of the capital market, the behavior of the large shareholders in the capital market of listed companies has become more and more common, among which the shareholders’ equity pledge has been widely concerned by the media, investment institutions and investors. Large shareholders’ equity pledge changes their portfolio risks, and the risk of their shareholders’ portfolio will affect the corporate risk-taking and performance at the same time. Therefore, it is necessary to study the mechanism of the impact of major shareholders’ equity pledge on corporate risk-taking and performance, so as to expand the research perspective of the impact of major shareholders’ characteristics on corporate risk-taking. In order to achieve this goal, this paper studies the impact of large shareholders’ equity pledge on corporate risk-taking and corporate performance by taking the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2017 as samples. The findings of this study are as follows: 1) The pledge of large shareholders’ equity increases the risk-taking of enterprises, which has a negative impact on the performance of enterprises; 2) The pledge of equity for different purposes will bring different economic consequences, that is, the investment of pledged capital in enterprises can improve the risk-taking of enterprises better than that in enterprises outside, and has a more significant negative impact on enterprise performance.

Cite this paper

Cai, H. (2019) The Influence of Large Shareholders’ Equity Pledge on the Corporate Risk-Taking and Performance. Journal of Service Science and Management, 12, 451-463. doi: 10.4236/jssm.2019.123031.

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