Controlling shareholder pledging and corporate ESG behavior

Wei Huang; Yan Luo; Xiaohuan Wang; Lifu Xiao

doi:10.1016/j.ribaf.2022.101655

Controlling shareholder pledging and corporate ESG behavior

Wei Huang
, Yan Luo^*
, Xiaohuan Wang
, Lifu Xiao

^*Corresponding author for this work

Department of Finance, Accounting and Economics

Research output: Journal Publication › Article › peer-review

68 Citations (Scopus)

Abstract

Utilizing a large sample of Chinese listed firms, we document strong and robust evidence that both firms’ environmental, social, and governance (ESG) performance and their ESG disclosure quality deteriorate significantly after controlling shareholders’ pledging of their shares for personal loans. The results are especially evident among firms with higher valuation uncertainty, such as small firms and high-tech firms. Lastly, we show that external monitoring by institutional investors helps to mitigate such adverse impacts of controlling shareholder pledging.

Original language	English
Article number	101655
Journal	Research in International Business and Finance
Volume	61
DOIs	https://doi.org/10.1016/j.ribaf.2022.101655
Publication status	Published - Oct 2022

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 9 Industry, Innovation, and Infrastructure

Free Keywords

Chinese A-share stock markets
Controlling shareholder pledging
ESG

ASJC Scopus subject areas

Business, Management and Accounting (miscellaneous)
Finance

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10.1016/j.ribaf.2022.101655

Cite this

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title = "Controlling shareholder pledging and corporate ESG behavior",

abstract = "Utilizing a large sample of Chinese listed firms, we document strong and robust evidence that both firms{\textquoteright} environmental, social, and governance (ESG) performance and their ESG disclosure quality deteriorate significantly after controlling shareholders{\textquoteright} pledging of their shares for personal loans. The results are especially evident among firms with higher valuation uncertainty, such as small firms and high-tech firms. Lastly, we show that external monitoring by institutional investors helps to mitigate such adverse impacts of controlling shareholder pledging.",

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AU - Huang, Wei

AU - Luo, Yan

AU - Wang, Xiaohuan

AU - Xiao, Lifu

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Y1 - 2022/10

N2 - Utilizing a large sample of Chinese listed firms, we document strong and robust evidence that both firms’ environmental, social, and governance (ESG) performance and their ESG disclosure quality deteriorate significantly after controlling shareholders’ pledging of their shares for personal loans. The results are especially evident among firms with higher valuation uncertainty, such as small firms and high-tech firms. Lastly, we show that external monitoring by institutional investors helps to mitigate such adverse impacts of controlling shareholder pledging.

AB - Utilizing a large sample of Chinese listed firms, we document strong and robust evidence that both firms’ environmental, social, and governance (ESG) performance and their ESG disclosure quality deteriorate significantly after controlling shareholders’ pledging of their shares for personal loans. The results are especially evident among firms with higher valuation uncertainty, such as small firms and high-tech firms. Lastly, we show that external monitoring by institutional investors helps to mitigate such adverse impacts of controlling shareholder pledging.

KW - Chinese A-share stock markets

KW - Controlling shareholder pledging

KW - ESG

UR - https://www.scopus.com/pages/publications/85128694042

U2 - 10.1016/j.ribaf.2022.101655

DO - 10.1016/j.ribaf.2022.101655

M3 - Article

AN - SCOPUS:85128694042

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JO - Research in International Business and Finance

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ER -

Controlling shareholder pledging and corporate ESG behavior

Abstract

UN SDGs

Free Keywords

ASJC Scopus subject areas

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