Do controlling shareholders' equity pledges exacerbate the stock price crash risk? -A study based on margin trading and securities lending transactions in China's securities market

It clarifies the influence mechanism of controlling shareholders' equity pledges, margin trading and securities lending, and stock price crash risk from the perspective of corporate governance, etc. This paper establishes a main and interaction effect regression model to empirically test the impact mechanism of controlling shareholders' equity pledge on stock price crash risk and the moderating effect of margin trading and securities lending in the process of this impact based on the measures of stock price crash risk, controlling shareholders' equity pledge level, as well as margin trading and securities lending transaction size, using China's A-share listed companies from 2010 to 2020 as the sample. It finds that: (i) The higher the controlling shareholder's equity pledge ratio of listed companies, the lower the stock price crash risk. (ii) There is no significant effect of margin trading and securities lending transactions on stock price crash risk. (iii) Securities lending transactions have a positive moderating effect in the impact of controlling shareholders' equity pledges on stock price crash risk, but the moderating effect of margin trading transactions is insignificant.