Financing constraints and share pledges: Evidence from the share pledge reform in China

被引:43
作者
Shi, Yang [1 ]
Li, Jiachen [2 ]
Liu, Ruiming [3 ]
机构
[1] Northwest Univ, Sch Econ & Management, 1 Xuefu Ave, Xian 710127, Peoples R China
[2] Renmin Univ China, Sch Econ, 59 Zhongguancun St, Beijing 100872, Peoples R China
[3] Renmin Univ China, Natl Acad Dev & Strategy, 59 Zhongguancun St, Beijing 100872, Peoples R China
基金
中国国家自然科学基金; 国家教育部科学基金资助;
关键词
Financing constraints; Share pledges; Controlling shareholders; Share pledge reform; BANK DISCRIMINATION; FIRMS; INVESTMENT; OWNERSHIP; GROWTH; CREDIT; STOCK; GOVERNANCE; CONSEQUENCES; INNOVATION;
D O I
10.1016/j.jcorpfin.2022.102337
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Financing constraints are important to triggering controlling shareholders' share pledges. However, the related literature faces two major challenges: the endogeneity problem and the lack of direct evidence of why and how individual share pledges can ease corporate financing constraints. Based on China's Share Pledge Reform (SPR) in Q4 2012 and the phenomenon that private firms face discrimination when obtaining bank loans, this paper studies the impact of financing constraints on share pledging behavior and its mechanisms by building a difference-indifferences (DID) model. The SPR makes it more convenient for shareholders to raise money through share pledges, and shareholders of private firms facing stronger financing constraints are more vulnerable to this reform than are state-owned enterprises (SOEs). After the SPR, the probability of share pledging by controlling shareholders of private firms is approximately 23.04% higher than that of controlling shareholders of SOEs, and the pledge ratio is approximately 16.53% higher. Further tests reveal that, after the SPR, controlling shareholders of private firms are more inclined than those of SOEs to provide loans to the company to alleviate its financing constraints. Heterogeneity tests further corroborate the finding that this effect is more significant in private firms that are smaller and do not have shareholders of banking and institutional firms among their top ten shareholders.
引用
收藏
页数:25
相关论文
共 82 条
[1]   The Power of the Street: Evidence from Egypt's Arab Spring [J].
Acemoglu, Daron ;
Hassan, Tarek A. ;
Tahoun, Ahmed .
REVIEW OF FINANCIAL STUDIES, 2018, 31 (01) :1-42
[2]   Law, finance, and economic growth in China [J].
Allen, F ;
Qian, J ;
Qian, MJ .
JOURNAL OF FINANCIAL ECONOMICS, 2005, 77 (01) :57-116
[3]   Understanding informal financing [J].
Allen, Franklin ;
Qian Meijun ;
Xie Jing .
JOURNAL OF FINANCIAL INTERMEDIATION, 2019, 39 :19-33
[4]   The cash flow sensitivity of cash [J].
Almeida, H ;
Campello, M ;
Weisbach, MS .
JOURNAL OF FINANCE, 2004, 59 (04) :1777-1804
[5]   Financial constraints, asset tangibility, and corporate investment [J].
Almeida, Heitor ;
Campello, Murillo .
REVIEW OF FINANCIAL STUDIES, 2007, 20 (05) :1429-1460
[6]   Insider Share-Pledging and Equity Risk [J].
Anderson, Ronald ;
Puleo, Michael .
JOURNAL OF FINANCIAL SERVICES RESEARCH, 2020, 58 (01) :1-25
[7]   Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition [J].
Ayyagari, Meghana ;
Demirguec-Kunt, Asli ;
Maksimovic, Vojislav .
JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS, 2011, 46 (06) :1545-1580
[8]   Tunneling or value added? Evidence from mergers by Korean business groups [J].
Bae, KH ;
Kang, JK ;
Kim, JM .
JOURNAL OF FINANCE, 2002, 57 (06) :2695-2740
[9]   Business groups and tunneling: Evidence from private securities offeringsby Korean chaebols [J].
Baek, Jae-Seung ;
Kang, Jun-Koo ;
Lee, Inmoo .
JOURNAL OF FINANCE, 2006, 61 (05) :2415-2449
[10]  
Bai C., 2004, BAD NEWS IS GOOD NEW