E3S Web Conf.
Volume 214, 20202020 International Conference on Energy Big Data and Low-carbon Development Management (EBLDM 2020)
|Number of page(s)||5|
|Section||Machine Learning and Energy Industry Structure Forecast Analysis|
|Published online||07 December 2020|
Controlling shareholder share pledging and Enterprise Cost Stickiness: Evidence from Chinese Firms
1 Business School, Sichuan University, Chengdu, China
2 Business School, Sichuan University, Chengdu, China
3 Business School, Sichuan University, Chengdu, China
4 Sichuan Branch, Industrial and Commercial Bank of China Limited, Chengdu, China
Using a sample of Chinese enterprises pledge during the period 2008-2017, this paper investigates the cost management behavior of enterprises during the pledge period of major shareholders’ stock rights. Our findings show that with the increase of the equity pledge rate, the cost stickiness of enterprises is enhanced. Further analysis shows that the behavior that the controlling shareholder invests the equity pledge funds to a third party weakens the cost stickiness of the enterprise. We further contribute to the literature on sticky cost and equity pledge by discussing the strategic choices of major shareholders to avoid risks during the equity pledge period.
© The Authors, published by EDP Sciences, 2020
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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