The effect of stock pledge on corporate fraudulence: Evidence from China

Han Han, Xueqing Zhao and Zhibin Wang

Finance Research Letters, 2023, vol. 57, issue C

Abstract: This paper studies whether and how controlling shareholders’ stock pledge affects corporate fraudulence. We find that both the pledge behavior and the pledge ratio of the controlling shareholders are positively associated with future corporate fraudulence. The results are robust after addressing endogeneity issues by using PSM and IV approach. We then provide evidence that the increasing effect of stock pledge on fraudulence is probably due to the controlling shareholders’ fear of control transfer. Finally, we find that high media or investor attention can effectively weaken the positive effect of stock pledge on corporate fraudulence.

Keywords: Stock pledge; Control transfer; Corporate fraudulence (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612323005676
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323005676

DOI: 10.1016/j.frl.2023.104195

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().