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Impact of controlling shareholders’ equity pledges on firms’ labour investment efficiency

Author

Listed:
  • Qiu, Yong
  • Guo, Ziyang
  • Li, Junlong
  • Li, Biao
  • Qiao, Dan

Abstract

Controlling shareholders in the Chinese capital market are increasingly obtaining pledged loans from financial institutions through equity pledges. This study analyses the relationship between controlling shareholders’ equity pledges and the labour investment efficiency of listed companies using a sample of listed companies from 2009 to 2022. Controlling shareholders’ equity pledges reduce labour investment efficiency by exacerbating capital pressure and refocusing business investment. Furthermore, the inhibitory effect of equity pledges on labour investment efficiency is more pronounced in companies with lower audit quality, lower equity checks and balances and higher degrees of equity pledges.

Suggested Citation

  • Qiu, Yong & Guo, Ziyang & Li, Junlong & Li, Biao & Qiao, Dan, 2024. "Impact of controlling shareholders’ equity pledges on firms’ labour investment efficiency," Finance Research Letters, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324014375
    DOI: 10.1016/j.frl.2024.106408
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    Keywords

    Equity pledge; Labour investment efficiency; Listed company;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • G00 - Financial Economics - - General - - - General

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