Pledge of Controlling Shareholders' Equity and Systematic Tail Risk——From the Perspective of Competitive Motivations of"Supporting"and"Infringing"
This paper explores the impact of controlling shareholders'equity pledge on the systematic tail risk of enter-prises from the perspective of competitive motivations of"supporting"and"infringing"enterprises.Research has found that there is a U-shaped relationship between the level of equity pledge by controlling shareholders and the systematic tail risk of enterprises.When the pledge level is below the critical value,the pledge can effectively alleviate the systematic tail risk of the enterprise.When the pledge level exceeds the critical value,the pledge will increase the systematic tail risk of the enterprise.Financing constraints and operating performance are the two paths through which controlling shareholders'equity pledge affects the systematic tail risk of the enterprise,and the financing constraints and operating performance show U-shaped and inverted U-shaped relationship respectively with the pledge level.The U-shaped relationship between pledge level and systematic tail risk is more pronounced in state-owned enterprises,enterprises with higher shareholding ratios of controlling shareholders,and enterprises with lower stock liquidity.