Theme：Share Pledging in China: Funding Listed Firms or Funding Entrepreneurship?

Lecturer：Feifei Zhu,School of Finance, Central University of Finance and Economics

Time：2022.05.13 15:00

Site：Tecent meeting 650769837

  Abstract：

  This paper studies the connection between share pledging and entrepreneurial activities in China, challenging the common wisdom that share pledging funds circle back to the listed firms. Share pledging funds are at the discretion of the shareholders who pledge their publicly traded shares, and survey evidence shows that a majority of the largest shareholders (67.3%) used pledging funds outside the listed firms. By linking firm registration data with share pledging data, we show a positive relation between shareholders’ pledging transactions and entrepreneurial activities. Utilizing the launch of the exchange market in 2013 as a quasi-natural experiment that favors share pledging by natural person shareholders against that by legal entity shareholders, our difference-in-differences (DiD) analysis shows natural person shareholders increased their entrepreneurial activities significantly in response to the policy shock, relative to legal entity shareholders. In addition to various robustness checks, we also show that shareholders with better access to share pledging invest more heavily in industries with above-median growth potential.

  Introduction to the lecturer：

  Feifei Zhu is a lecturer at school of Finance, Central University of Finance and Economics, young researcher of China Fortune 50 Forum, and researcher of Xiangshuai Digital Economy Laboratory. He received his ph. D. degree from Guanghua School of Management, Peking University, and is a visiting scholar at the University of Chicago. Her research interests are corporate finance, green finance, public funds, and banking financial institutions. She has published dozens of papers in high level journals at home and abroad, including Economics (Quarterly), Financial Research, Quantitative And Technical Economics, Accounting and Finance, etc. He has presided over one youth project of national Natural Science Foundation of China and participated in several projects of National Natural Science Foundation of China and National Social Science Foundation of China.