Controlling Shareholders’ Equity Pledge and Listed Companies’ Stock Repurchase

Abstract

Based on the unbalanced panel data of China’s A-share listed companies from 2013 to 2021, this paper empirically examines the influence of controlling shareholders’ equity pledge on the listed companies’ stock repurchase. It is found that listed companies will stabilize the share price through stock repurchase to prevent the risk of control right transfer due to stock price decline. There is a positive correlation between equity pledge and stock repurchase. Moreover, this positive correlation is more significant among nonstate-owned listed companies and listed companies in the eastern region. Further research shows that the positive influence of equity pledge on stock repurchase is more significant under a good information environment and good corporate governance. However, the earnings management behavior of listed companies has no significant influence on the positive influence of equity pledge on stock repurchase.