Executive team heterogeneity and the moral hazard of equity pledging: Evidence from China

This study empirically examines the relationship between executive team heterogeneity and equity pledge moral hazard using data about Chinese A-share listed companies from 2010 to 2020. We find that increasing top management team heterogeneity (including financial background, overseas background, educational background, gender, and age) can significantly reduce equity pledge moral hazard, while also finding a moderating effect from executive compensation. Our research can help listed companies manage the moral hazards associated with equity pledges from the perspective of the executive team, such as personnel arrangements and compensation adjustments.