Is pledge risk matched between pledgees and pledgers in China’s share pledge market?
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 stock...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2021-12-01
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| Series: | China Journal of Accounting Research |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S1755309121000496 |
| _version_ | 1818984079023931392 |
|---|---|
| author | Deren Xie Mengyu Zhang |
| author_facet | Deren Xie Mengyu Zhang |
| author_sort | Deren Xie |
| collection | DOAJ |
| description | 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 state-owned 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. |
| first_indexed | 2024-12-20T18:13:18Z |
| format | Article |
| id | doaj.art-2a962355a6e2431cace172daada2d7ea |
| institution | Directory Open Access Journal |
| issn | 1755-3091 |
| language | English |
| last_indexed | 2024-12-20T18:13:18Z |
| publishDate | 2021-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | China Journal of Accounting Research |
| spelling | doaj.art-2a962355a6e2431cace172daada2d7ea2022-12-21T19:30:26ZengElsevierChina Journal of Accounting Research1755-30912021-12-01144100207Is pledge risk matched between pledgees and pledgers in China’s share pledge market?Deren Xie0Mengyu Zhang1Tsinghua University, Beijing, ChinaCorresponding author.; Tsinghua University, Beijing, ChinaBased 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 state-owned 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.http://www.sciencedirect.com/science/article/pii/S1755309121000496Share pledgePledgeesPledgersRisk matching |
| spellingShingle | Deren Xie Mengyu Zhang Is pledge risk matched between pledgees and pledgers in China’s share pledge market? China Journal of Accounting Research Share pledge Pledgees Pledgers Risk matching |
| title | Is pledge risk matched between pledgees and pledgers in China’s share pledge market? |
| title_full | Is pledge risk matched between pledgees and pledgers in China’s share pledge market? |
| title_fullStr | Is pledge risk matched between pledgees and pledgers in China’s share pledge market? |
| title_full_unstemmed | Is pledge risk matched between pledgees and pledgers in China’s share pledge market? |
| title_short | Is pledge risk matched between pledgees and pledgers in China’s share pledge market? |
| title_sort | is pledge risk matched between pledgees and pledgers in china s share pledge market |
| topic | Share pledge Pledgees Pledgers Risk matching |
| url | http://www.sciencedirect.com/science/article/pii/S1755309121000496 |
| work_keys_str_mv | AT derenxie ispledgeriskmatchedbetweenpledgeesandpledgersinchinassharepledgemarket AT mengyuzhang ispledgeriskmatchedbetweenpledgeesandpledgersinchinassharepledgemarket |