Advances in Economics, Management and Political Sciences
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Proceedings of the 2nd International Conference on Business and Policy Studies
Series Vol. 9 , 13 September 2023
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The Influence of Share Pledging on Corporate Financial Performance: Evidence from a Case Study in China
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Abstract
Share pledging has been developing rapidly in China, which has an essential impact on the capital market and corporate operation. This paper aims to figure out the influence of controlling shareholder’s share pledging behavior on corporate financial performance based on a case study. Collecting the data of Nanjing Xinjiekou Department Store Co., Ltd., a series of ratio analyses was made to evaluate the corporate financial performance impacted by the share pledging of controlling shareholders from 2015 to 2021. It is found that large-scale share pledging can lead to poor liquidity and solvency abilities of a company. The profitability and developing capacity can theoretically be decreased by share pledging behavior when the enterprise tend to make in highly risky investments. Furthermore, this study suggests that enterprises should make rational use of funds, improve the internal control mechanism and enhance the information transparency to achieve better development through share pledging behaviors. The findings are theoretically and practically meaningful for the enterprises and capital market.
Keywords
share pledging, financial ratio analysis, corporate financial performance
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-915371-45-4
- ISBN (Online)
- 978-1-915371-46-1
- Published Date
- 13 September 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/9/20230371
- Copyright
- 13 September 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited