This article aims to provide a literature review on the impact of equity pledges on corporate value,and to explore in depth the application of equity pledges as a financial tool in corporate governance and capital ope...This article aims to provide a literature review on the impact of equity pledges on corporate value,and to explore in depth the application of equity pledges as a financial tool in corporate governance and capital operation,as well as its multidimensional impact on corporate value.By reviewing and analyzing relevant literature both domestically and internationally,this article first defines the basic concept of equity pledges and then elaborates on the impact mechanism of equity pledges on company value from both positive and negative perspectives.In terms of positive impact,this article explores how equity pledges can promote corporate financing,optimize capital structure,and enhance the control of major shareholders over the company.In terms of negative impacts,the possible control risk,market risk,and potential damage to the interests of small and medium-sized shareholders brought about by equity pledges were analyzed.Furthermore,this article also discusses the differences in the impact of equity pledges on company value in different scenarios and proposes corresponding policy recommendations and research prospects.展开更多
Background:We investigated the determination of the pledged loan-to-value ratio in an optionpricing environment and mainly articulated the theoretical framework and analytical method.Methods:The basic idea is that the...Background:We investigated the determination of the pledged loan-to-value ratio in an optionpricing environment and mainly articulated the theoretical framework and analytical method.Methods:The basic idea is that the present value of the pledged loan payoff is equal to a put option’s value.While the interest rate is fixed and the loan is without coupon,we analyzed the pledged loan-to-value ratioin the option pricing perspective and got it that the pledged loan-to-value ratio is decided by term,excessreturn,and the value volatility of the pledge.Next,we extended the same work to coupon loan and portfoliopledge circumstances.For zero coupon and fixed interest rate circumstances,we performed a numericalanalysis.Results:Our results indicate the following:the pledged loan-to-value ratio is a convex decreasing function ofthe term;and the pledged loan-to-value ratio is a concave decreasing function of the value volatility of the pledge;and the pledged loan-to-value ratio is a concave increasing function of the risk premium.For floating interest rate circumstances,we should specify the function form between the loan interest and the risk-free rate.Conclusions:The scientific measurement of the pledged loan-to-value ratio means that simple rules of thumb or the VaR method may lead to mispricing,which could create the possibility of arbitrage.In this way,a new direction for trading derivative products of pledges will be provided.展开更多
Inventory pledge financing not only solves the financing difficulties of small and medium-sized enterprises,but also opens up business channels for banks.Under the random market demand,this article studies the pledge ...Inventory pledge financing not only solves the financing difficulties of small and medium-sized enterprises,but also opens up business channels for banks.Under the random market demand,this article studies the pledge decision-making of perishable pledges in the inventory pledge business,On the basis of considering the supervision of the Internet of Things technology to reduce the loss rate of quality goods,a decision model of the pledge rate of the bank is constructed in the case of not adopting the Internet of things technology and adopting the Internet of things technology.The pledge rate decision-making model in the two technical situations aims at maximizing the profit at the end of the pledge period.The factors in the model such as the pledge rate,end-of-period income,and IoT technology coverage rate are analyzed respectively,and finally the decision-making process is verified through calculation examples.Studies have shown that,when Internet of Things technology is not adopted,the income of bank pledge business first increases and then decreases with the growth of pledge rate.After the adoption of Internet of Things technology,the income of Banks is inversely proportional to the coverage rate of Internet of Things technology.However,within a certain coverage range,Banks can obtain greater income by using Internet of Things technology to supervise pledges.展开更多
Since the promulgation of the Guarantee Law of the People's Republic of China,the pledge of equity in China's capital market is becoming more and more frequent. This paper attempts to study the relationship be...Since the promulgation of the Guarantee Law of the People's Republic of China,the pledge of equity in China's capital market is becoming more and more frequent. This paper attempts to study the relationship between equity pledge,the individual behavior of shareholders and cash holding level of enterprises. Based on the data of Shanghai-Shenzhen A-share listed companies in 2009-2016,multiple regression model was established to study the impact of equity pledge behavior on corporate cash holdings. It is found that equity pledge and pledge ratio are significantly negatively correlated with cash holding level. This can effectively alleviate the financial constraints of listed companies in China.展开更多
Based on a sample of share pledging by the controlling shareholders of A-share listed firms,we investigate whether pledge risk is matched between pledgees and pledgers in China’s share pledge market.The results show ...Based on a sample of share pledging by the controlling shareholders of A-share listed firms,we investigate whether pledge risk is matched between pledgees and pledgers in China’s share pledge market.The results show that,compared with broker pledgees,commercial bank pledgees accept pledged stocks with lower market risk and the corresponding listed firms are at lower risk,have higher levels of information transparency and are more likely to be stateowned enterprises(SOEs).We also find that commercial bank pledgees do not ease the risk requirement of pledged stocks for pledgers of SOEs.Further,we document that commercial bank pledgees face lower margin call risks than broker pledgees.After securities companies were authorized to compete in the share pledge market in 2013,the pledge risk faced by commercial bank pledgees further reduced.Our results support that China’s share pledge financing market generally achieves an efficient equilibrium in terms of pledge risk matching between pledgees and pledgers.We recommend that the macro control of share pledge risk be focused on broker pledgees.展开更多
We investigate whether pledgee competition affects the disclosure choice of firms whose controlling shareholders pledge their shares.We find that pledgee competition is positively related to pledge firms’ annual repo...We investigate whether pledgee competition affects the disclosure choice of firms whose controlling shareholders pledge their shares.We find that pledgee competition is positively related to pledge firms’ annual report tone management.This positive relationship is stronger for pledge firms with lower credit quality and non-state-owned enterprise pledge firms.Further corroborating our results, higher pledgee competition increases the future crash risk of pledge firms.Collectively, our results suggest that competition pressure induces pledgees to lower their monitoring incentives to remain competitive in the marketplace, thus leading to pledge firms’ bad news hoarding behavior.展开更多
In this paper, we present evidence that firms with concentrated ownership manage earnings when their large shareholders have an incentive to do so.The large shareholders of Chinese public firms often pledge their shar...In this paper, we present evidence that firms with concentrated ownership manage earnings when their large shareholders have an incentive to do so.The large shareholders of Chinese public firms often pledge their shares for loans. Before the split share reform in 2006, loan terms were based on the book value of the firm. Since then, the share price has become critical for share pledged loans. We postulate that the reform triggered large shareholders' incentive to influence financial reports. Using a sample of non-state-owned enterprises, we test the effect of share pledges on earnings smoothing and how this effect changes after the reform. Our results suggest that share pledging firms smooth their earnings more than other firms, but these results are only found after the split share reform. Accordingly, our results provide more direct evidence on the effect of ownership concentration on financial reporting.展开更多
We use the share pledge context in China to examine how affiliated analysts whose securities companies are pledgees of share pledge firms issue stock recommendations on these listed firms.We find that their recommenda...We use the share pledge context in China to examine how affiliated analysts whose securities companies are pledgees of share pledge firms issue stock recommendations on these listed firms.We find that their recommendations are more optimistic than those of non-affiliated analysts,and they are more likely to issue Buy and Add recommendations,suggesting that they issue optimistic rating reports for share pledge firms due to their conflicts of interest.We also find a dynamic adjustment in the stock recommendation behavior of these analysts,and their probability after issuing optimistic stock recommendations is significantly reduced before and after the years that the affiliation relationship between them and share pledge firms both began and ended.These affiliated analysts continue to issue optimistic stock recommendations after visiting the share pledge firms if they work in the same location as the firms,or if they are star analysts among New Fortune’s‘‘top five analysts,"and when the information transparency of the share pledge firms is higher.In addition,the optimistic stock recommendation behavior of affiliated analysts is more significant in our sample of firms with high share pledge ratios and downward stock price pressure.The earnings forecast quality of affiliated analysts is also found to be lower,and they are less inclined to downgrade stock recommendations for these share pledge firms.Buy recommendations issued by both nonaffiliated and affiliated analysts can bring cumulative excess returns in the short event window,but those issued by affiliated analysts are significantly negative in the long-term event window,and significantly lower than those issued by non-affiliated analysts.Overall,our study shows that affiliated analysts issue optimistic rating reports on share pledge firms due to conflicts of interest,which leads to decision-making bias in investors and thus decreases the stock price crash risk of the firms.Our findings further reveal the economic consequences of share pledging and extend our understanding of the behavior of analysts in a conflict of interest situation from the share pledge perspective.展开更多
As 2006 unfolds, China plans to transform its economic development mode to usher in a new era of innovation. The National Conference on Science and Technology, held this month, provides a fresh impetus to that endeavo...As 2006 unfolds, China plans to transform its economic development mode to usher in a new era of innovation. The National Conference on Science and Technology, held this month, provides a fresh impetus to that endeavor. The strategy of "enhancing展开更多
China will offer assistance to conflict-ridden Afghanistan in variousforms—including funding for development, personnel training and help in establishing joint ventures, said
<strong>Purpose:</strong> To understand the awareness and knowledge about eye donation in the employees of a tertiary hospital. <strong>Methods:</strong> A structured Google form based cross-se...<strong>Purpose:</strong> To understand the awareness and knowledge about eye donation in the employees of a tertiary hospital. <strong>Methods:</strong> A structured Google form based cross-sectional survey was conducted among 678 employees comprising of medical, nursing, students and paramedical staff. The responses were evaluated in an Excel spreadsheet and tabulated. <strong>Results:</strong> 86% of the employees had awareness about eye donation, however, their knowledge regarding the same was either inadequate or incorrect. Only 63% had pledged their eyes and of the remaining, about 63.5% were willing to pledge. <strong>Conclusion:</strong> Awareness levels are high among the hospital workers but the lack of basic information is alarming. These need to be improved so that common people can be motivated to pledge and donate their eyes and correct the disparity between the need and availability of donor eyes for transplants.展开更多
文摘This article aims to provide a literature review on the impact of equity pledges on corporate value,and to explore in depth the application of equity pledges as a financial tool in corporate governance and capital operation,as well as its multidimensional impact on corporate value.By reviewing and analyzing relevant literature both domestically and internationally,this article first defines the basic concept of equity pledges and then elaborates on the impact mechanism of equity pledges on company value from both positive and negative perspectives.In terms of positive impact,this article explores how equity pledges can promote corporate financing,optimize capital structure,and enhance the control of major shareholders over the company.In terms of negative impacts,the possible control risk,market risk,and potential damage to the interests of small and medium-sized shareholders brought about by equity pledges were analyzed.Furthermore,this article also discusses the differences in the impact of equity pledges on company value in different scenarios and proposes corresponding policy recommendations and research prospects.
基金support of National Science Fund of China(No.71003005 and No.71373002).
文摘Background:We investigated the determination of the pledged loan-to-value ratio in an optionpricing environment and mainly articulated the theoretical framework and analytical method.Methods:The basic idea is that the present value of the pledged loan payoff is equal to a put option’s value.While the interest rate is fixed and the loan is without coupon,we analyzed the pledged loan-to-value ratioin the option pricing perspective and got it that the pledged loan-to-value ratio is decided by term,excessreturn,and the value volatility of the pledge.Next,we extended the same work to coupon loan and portfoliopledge circumstances.For zero coupon and fixed interest rate circumstances,we performed a numericalanalysis.Results:Our results indicate the following:the pledged loan-to-value ratio is a convex decreasing function ofthe term;and the pledged loan-to-value ratio is a concave decreasing function of the value volatility of the pledge;and the pledged loan-to-value ratio is a concave increasing function of the risk premium.For floating interest rate circumstances,we should specify the function form between the loan interest and the risk-free rate.Conclusions:The scientific measurement of the pledged loan-to-value ratio means that simple rules of thumb or the VaR method may lead to mispricing,which could create the possibility of arbitrage.In this way,a new direction for trading derivative products of pledges will be provided.
文摘Inventory pledge financing not only solves the financing difficulties of small and medium-sized enterprises,but also opens up business channels for banks.Under the random market demand,this article studies the pledge decision-making of perishable pledges in the inventory pledge business,On the basis of considering the supervision of the Internet of Things technology to reduce the loss rate of quality goods,a decision model of the pledge rate of the bank is constructed in the case of not adopting the Internet of things technology and adopting the Internet of things technology.The pledge rate decision-making model in the two technical situations aims at maximizing the profit at the end of the pledge period.The factors in the model such as the pledge rate,end-of-period income,and IoT technology coverage rate are analyzed respectively,and finally the decision-making process is verified through calculation examples.Studies have shown that,when Internet of Things technology is not adopted,the income of bank pledge business first increases and then decreases with the growth of pledge rate.After the adoption of Internet of Things technology,the income of Banks is inversely proportional to the coverage rate of Internet of Things technology.However,within a certain coverage range,Banks can obtain greater income by using Internet of Things technology to supervise pledges.
文摘Since the promulgation of the Guarantee Law of the People's Republic of China,the pledge of equity in China's capital market is becoming more and more frequent. This paper attempts to study the relationship between equity pledge,the individual behavior of shareholders and cash holding level of enterprises. Based on the data of Shanghai-Shenzhen A-share listed companies in 2009-2016,multiple regression model was established to study the impact of equity pledge behavior on corporate cash holdings. It is found that equity pledge and pledge ratio are significantly negatively correlated with cash holding level. This can effectively alleviate the financial constraints of listed companies in China.
文摘Based on a sample of share pledging by the controlling shareholders of A-share listed firms,we investigate whether pledge risk is matched between pledgees and pledgers in China’s share pledge market.The results show that,compared with broker pledgees,commercial bank pledgees accept pledged stocks with lower market risk and the corresponding listed firms are at lower risk,have higher levels of information transparency and are more likely to be stateowned enterprises(SOEs).We also find that commercial bank pledgees do not ease the risk requirement of pledged stocks for pledgers of SOEs.Further,we document that commercial bank pledgees face lower margin call risks than broker pledgees.After securities companies were authorized to compete in the share pledge market in 2013,the pledge risk faced by commercial bank pledgees further reduced.Our results support that China’s share pledge financing market generally achieves an efficient equilibrium in terms of pledge risk matching between pledgees and pledgers.We recommend that the macro control of share pledge risk be focused on broker pledgees.
基金the financial support from National Natural Science Foundation of China (NSFC Project Number 71802094)financial support from National Natural Science Foundation of China (NSFC Project Numbers 71272072, 71572042)
文摘We investigate whether pledgee competition affects the disclosure choice of firms whose controlling shareholders pledge their shares.We find that pledgee competition is positively related to pledge firms’ annual report tone management.This positive relationship is stronger for pledge firms with lower credit quality and non-state-owned enterprise pledge firms.Further corroborating our results, higher pledgee competition increases the future crash risk of pledge firms.Collectively, our results suggest that competition pressure induces pledgees to lower their monitoring incentives to remain competitive in the marketplace, thus leading to pledge firms’ bad news hoarding behavior.
基金supported by the National Natural Science Foundation (Project Nos. 70902007 and 71372029)
文摘In this paper, we present evidence that firms with concentrated ownership manage earnings when their large shareholders have an incentive to do so.The large shareholders of Chinese public firms often pledge their shares for loans. Before the split share reform in 2006, loan terms were based on the book value of the firm. Since then, the share price has become critical for share pledged loans. We postulate that the reform triggered large shareholders' incentive to influence financial reports. Using a sample of non-state-owned enterprises, we test the effect of share pledges on earnings smoothing and how this effect changes after the reform. Our results suggest that share pledging firms smooth their earnings more than other firms, but these results are only found after the split share reform. Accordingly, our results provide more direct evidence on the effect of ownership concentration on financial reporting.
基金financial support from the National Natural Science Foundation of China(No.71902006,71790604)Scientific Research Program of Beijing Municipal Education Commission(No.SM202010011007).
文摘We use the share pledge context in China to examine how affiliated analysts whose securities companies are pledgees of share pledge firms issue stock recommendations on these listed firms.We find that their recommendations are more optimistic than those of non-affiliated analysts,and they are more likely to issue Buy and Add recommendations,suggesting that they issue optimistic rating reports for share pledge firms due to their conflicts of interest.We also find a dynamic adjustment in the stock recommendation behavior of these analysts,and their probability after issuing optimistic stock recommendations is significantly reduced before and after the years that the affiliation relationship between them and share pledge firms both began and ended.These affiliated analysts continue to issue optimistic stock recommendations after visiting the share pledge firms if they work in the same location as the firms,or if they are star analysts among New Fortune’s‘‘top five analysts,"and when the information transparency of the share pledge firms is higher.In addition,the optimistic stock recommendation behavior of affiliated analysts is more significant in our sample of firms with high share pledge ratios and downward stock price pressure.The earnings forecast quality of affiliated analysts is also found to be lower,and they are less inclined to downgrade stock recommendations for these share pledge firms.Buy recommendations issued by both nonaffiliated and affiliated analysts can bring cumulative excess returns in the short event window,but those issued by affiliated analysts are significantly negative in the long-term event window,and significantly lower than those issued by non-affiliated analysts.Overall,our study shows that affiliated analysts issue optimistic rating reports on share pledge firms due to conflicts of interest,which leads to decision-making bias in investors and thus decreases the stock price crash risk of the firms.Our findings further reveal the economic consequences of share pledging and extend our understanding of the behavior of analysts in a conflict of interest situation from the share pledge perspective.
文摘As 2006 unfolds, China plans to transform its economic development mode to usher in a new era of innovation. The National Conference on Science and Technology, held this month, provides a fresh impetus to that endeavor. The strategy of "enhancing
文摘China will offer assistance to conflict-ridden Afghanistan in variousforms—including funding for development, personnel training and help in establishing joint ventures, said
文摘<strong>Purpose:</strong> To understand the awareness and knowledge about eye donation in the employees of a tertiary hospital. <strong>Methods:</strong> A structured Google form based cross-sectional survey was conducted among 678 employees comprising of medical, nursing, students and paramedical staff. The responses were evaluated in an Excel spreadsheet and tabulated. <strong>Results:</strong> 86% of the employees had awareness about eye donation, however, their knowledge regarding the same was either inadequate or incorrect. Only 63% had pledged their eyes and of the remaining, about 63.5% were willing to pledge. <strong>Conclusion:</strong> Awareness levels are high among the hospital workers but the lack of basic information is alarming. These need to be improved so that common people can be motivated to pledge and donate their eyes and correct the disparity between the need and availability of donor eyes for transplants.
