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Controlling shareholders' stock pledges and stock price crash risks

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  • Ren, Haibo
  • Xu, Yueping
  • Wu, Jiangning

Abstract

This study explores the influence of controlling shareholders' stock pledges on the risk of stock price crashes. The findings reveal that controlling shareholders' stock pledges have a positive correlation with the risk of stock price crashes. Specifically, corporations with controlling shareholders who have pledged their stocks are exposed to a higher risk of stock price crashes. However, a strong regulatory environment can mitigate the effect of controlling shareholders' stock pledges on the risk of stock price crashes.

Suggested Citation

  • Ren, Haibo & Xu, Yueping & Wu, Jiangning, 2024. "Controlling shareholders' stock pledges and stock price crash risks," Finance Research Letters, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:finlet:v:68:y:2024:i:c:s1544612324009863
    DOI: 10.1016/j.frl.2024.105956
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    References listed on IDEAS

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