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...

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Autores principales:	Deren Xie, Mengyu Zhang
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Share pledge Pledgees Pledgers Risk matching Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/2a962355a6e2431cace172daada2d7ea
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id	oai:doaj.org-article:2a962355a6e2431cace172daada2d7ea
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spelling	oai:doaj.org-article:2a962355a6e2431cace172daada2d7ea2021-11-26T04:25:55ZIs pledge risk matched between pledgees and pledgers in China’s share pledge market?1755-309110.1016/j.cjar.2021.100207https://doaj.org/article/2a962355a6e2431cace172daada2d7ea2021-12-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S1755309121000496https://doaj.org/toc/1755-3091Based 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.Deren XieMengyu ZhangElsevierarticleShare pledgePledgeesPledgersRisk matchingAccounting. BookkeepingHF5601-5689ENChina Journal of Accounting Research, Vol 14, Iss 4, Pp 100207- (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Share pledge Pledgees Pledgers Risk matching Accounting. Bookkeeping HF5601-5689
spellingShingle	Share pledge Pledgees Pledgers Risk matching Accounting. Bookkeeping HF5601-5689 Deren Xie Mengyu Zhang Is pledge risk matched between pledgees and pledgers in China’s share pledge market?
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.
format	article
author	Deren Xie Mengyu Zhang
author_facet	Deren Xie Mengyu Zhang
author_sort	Deren Xie
title	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_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_sort	is pledge risk matched between pledgees and pledgers in china’s share pledge market?
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/2a962355a6e2431cace172daada2d7ea
work_keys_str_mv	AT derenxie ispledgeriskmatchedbetweenpledgeesandpledgersinchinassharepledgemarket AT mengyuzhang ispledgeriskmatchedbetweenpledgeesandpledgersinchinassharepledgemarket
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Is pledge risk matched between pledgees and pledgers in China’s share pledge market?

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