The influence mechanism of controlling shareholders' equity pledges on corporate risk-taking

Qin Guo and Yuanping Zhao

Finance Research Letters, 2025, vol. 82, issue C

Abstract: This paper employs China's A-share listed companies from 2012 to 2023 as the research sample to examine the impact of controlling shareholders' equity pledge behavior on corporate risk-taking. It also tests the moderating role of the threat of share withdrawal by non-controlling major shareholders. The findings reveal that controlling shareholders' equity pledges result in lower levels of corporate risk-taking. Further analysis indicates that the threat of withdrawal by non-controlling major shareholders mitigates the negative correlation between controlling shareholders' equity pledges and corporate risk-taking. Additionally, we discover that the quality of disclosure has a mediating effect in controlling shareholders' equity pledges, which reduces corporate risk-taking.

Keywords: Controlling shareholders; Equity pledge; Threat of withdrawal; Risk-taking (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008232

DOI: 10.1016/j.frl.2025.107564

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