The impact of share‐pledging purposes on firm performance and innovation
研究控股股东为支持企业融资（商业质押）与为个人财富（个人质押）而质押股份时，公司绩效和创新产出的差异，发现商业质押企业表现更好。
Abstract Research question Share pledging by controlling shareholders can be motivated by business or personal purposes. We investigate whether the firm performance and innovation outputs are different for firms with controlling shareholders pledging shares to support their firm's financing (business‐pledging firms) and those pledging shares for increasing personal wealth (individual‐pledging firms). Research findings Using data from publicly listed Chinese firms, we find that business‐pledging firms are associated with higher changes in Tobin's Q and more patent outputs compared with individual‐pledging firms. In additional tests, we show that the impact of share‐pledging purposes on firm performance and innovative outputs is more pronounced for Chinese non‐state‐owned enterprises, which have relatively limited access to traditional bank loans. Theoretical implications In this study, we bring new empirical evidence to agency theory, especially the “principal–principal” problem. We identify two inherently different purposes in share‐pledging cases—business pledging and individual pledging. We show that in business‐pledging cases, pledgers' interests become more aligned with outside shareholders, and pledgers have higher incentives to enhance firm value and innovation productivity, relative to individual pledging. This paper adds to the evidence on the bright side of share pledges. Practitioner implications This paper sheds light on the recent policy debate regarding the costs and benefits of share pledging and has implications for regulators and investors. Thus, it may be vital for publicly listed firms to disclose the purposes of share pledging.