Work

Does controlling shareholders’ share pledge exacerbate excessive financialization of enterprises?—Evidence from performance pressure perspective

Year: 2023

Type: article

Abstract: Based on the perspective of performance pressure, we explore the influence of controlling shareholders' share pledge on excessive financialization behavior of enterprises and its internal mechanism. The results show that the share pledge of controlling shareholders is positively correlated with the excessive financialization behavior of enterprises. After the controlling shareholder's share pledge, the actual performance of the enterprise is lower than expected, causing the short-sighted behavior of the management, which makes the management willing to conspire with the controlling shareholder to cause the excessive financialization of the enterprise. The results are especially evident among the uncertainty of economic policy is low, the industry competition is not fierce and the executives have overseas experience.

Source: PLoS ONE

DOI: 10.1371/journal.pone.0288705

Authors: Yue Xie, Tianhui Wang, Jinhua Zhang, Na Wang

Institution: Zhejiang University of Technology

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,805

Funders: National Natural Science Foundation of China, National Office for Philosophy and Social Sciences, National Social Science Fund of China