Equity pledge of controlling shareholders, property right structure and enterprise innovation efficiency: evidence from Chinese firms

Figures & data

Table 1. Definition of variables.

Category	Name	Symbol	Definition
Dependent variable	Enterprise innovation efficiency	P/R	The patent application number of the firm in the current year / the natural logarithm of the enterprise’s R & D investment in that year
Independent variable	Equity pledge	Pledge	The number of equity pledge of controlling shareholders / the total number of shares held by controlling shareholders at the end of the year
Control variable	Firm size	Size	Ln (number of employees)
	Asset-liability ratio	Lev	Total debts / total assets
	Return on assets	Roa	Net income / average total assets
	Tobin’s Q	Tobin’s Q	The market value of the enterprise / total assets of the enterprise in the end of the year
	Firm age	Age	Ln (number of years since establishment)
	Proportion of independent directors	Indep	Number of independent directors / total number of directors
	Proportion of fixed assets	Tang	Fixed assets / total assets at the end of the year
	Board size	Board	Ln (number of directors at the end of the year + 1)
	CEO duality	Duality	Whether the chairman and the general manager are the same person, the assignment is 1 if they are the same person, otherwise it is 0.
	Year	Year	Dummy variable, it is equal to 1 if associated with the corresponding year.
	Industry	Indu	Dummy variable, it is equal to 1 if affiliated at the corresponding two-digit industry
Grouping variable	Equity nature	Eqnaure	The ultimate ownership of the company is determined by the nature of the company, non-SOEs being recorded as 1, and the non-SOEs being recorded as 0
	Equity concentration	Top1	If the largest shareholder of the sample company holds more than or equal to 30%, it is defined as the equity concentrated sample, otherwise it is the equity decentralized sample.

Source: The authors.

Table 2. Descriptive statistics.

Variable	N	Mean	SD	Min	Median	Max
P/R	4227	0.434	0.774	0	−0.042	1.635
Pledge	4227	0.105	0.199	0	0	0.958
Sise	4227	1.345	0.059	0.967	1.332	1.468
Lev	4227	0.389	0.189	0.059	0.377	0.836
Roa	4227	0.053	0.040	0.002	0.045	0.195
Tobin’s Q	4227	2.02	1.77	0.239	1.521	11.04
Age	4227	1.924	0.928	0	2.079	3.258
Indep	4227	0.376	0.053	0.333	0.357	0.571
Tang	4227	0.203	0.143	0.004	0.175	0.646
Board	4227	0.343	0.144	0.086	0.326	0.732
Duality	4227	0.692	0.462	0	1	1

Source: The authors.

Table 3. Correlation matrix of variables.

Variable	P/R	Pledge	Size	Lev	Tobin’Q	Age	Indep	Tang	Duality	Roa	Board
P/R	1	−0.028***	0.385***	−0.222***	0.141***	−0.125***	0.015*	−0.011	0.066***	0.029***	0.092***
Pledge	−0.044***	1	−0.046***	−0.052***	0.083***	−0.203***	0.032	−0.052*	−0.110***	0.011*	−0.108***
Size	0.339***	−0.097***	1	−0.429***	0.316***	−0.437***	0.095*	0.129**	0.012***	0.027	0.077**
Lev	−0.229***	−0.042***	−0.427***	1	−0.321***	0.346***	−0.019**	0.059**	0.146***	−0.425***	0.145***
Tobin’Q	0.114***	0.047***	0.415*	−0.330***	1	−0.183***	0.032***	−0.096**	−0.109***	0.301***	−0.133***
Age	−0.134***	−0.142***	−0.379***	0.243***	−0.044***	1	−0.045***	0.098***	0.258***	−0.290***	0.183***
Indep	0.041*	0.013	0.174*	−0.011	0.040***	−0.032***	1	−0.053***	−0.114***	0.004	−0.145***
Tang	−0.036	−0.042*	0.229**	0.096**	−0.106**	0.136***	−0.046***	1	0.061***	−0.095***	0.116***
Duality	0.055***	−0.076***	0.008***	0.150***	−0.064***	0.253***	−0.117***	0.076***	1	−0.108***	0.189***
Roa	0.012***	0.028*	0.003	−0.411***	0.273***	−0.257***	0.009	−0.099***	−0.097***	1	−0.051***
Board	0.078***	−0.076***	0.092**	0.160***	−0.117***	0.172***	−0.575***	0.143***	0.177***	−0.052***	1

Note: ***, ** and * indicate significant at the level of 1%, 5% and 10% respectively.

Source: The authors.

Table 4. Regression result of equity pledge on enterprise innovation efficiency.

Variable	Coefficient	t
Pledge	−1.493**	−2.014
Sise	5.015**	2.035
Lev	−6.246***	−9.647
Roa	21.231***	15.386
Tobin’s Q	0.533***	2.811
Age	−0.839**	−2.168
Indep	10.045*	1.897
Tang	−2.385	−0.660
Board	3.236***	8.950
Duality	0.032**	2.290
Constant	−15.546***	−11.659
Year	Yes
Indu	Yes
Observations	4227
R-squared	0.205
Adjusted R-squared	0.199
F	36.628***

Note: ***, ** and * indicate significant at the level of 1%, 5% and 10% respectively.

Source: The authors.

Table 5. Subsample grouping regression results with different nature of equity.

Variable	Non-SOEs		SOEs
	Coefficient	t	Coefficient	t
Pledge	−3.188***	−3.213	−0.361	−1.599
Sise	6.372**	2.156	3.927*	1.802
Lev	−6.632***	−7.757	−5.956***	−9.470
Roa	23.246***	16.077	20.600***	16.235
Tobin’s Q	1.003**	2.026	1.408***	3.162
Age	−0.333*	−1.809	−0.511**	−2.296
Indep	22.150***	9.087	2.798**	2.449
Tang	−3.296	−1.347	−1.026	−1.416
Board	3.370***	4.214	2.036***	5.459
Duality	0.014*	1.724	0.098*	1.855
Constant	−18.856***	−6.659	−9.047***	−6.385
Year	Yes		Yes
Indu	Yes		Yes
Observations	1422		2805
R-squared	0.286		0.173
Adjusted R-squared	0.271		0.165
F	18.669***		22.583***

Note: ***, ** and * indicate significant at the level of 1%, 5% and 10% respectively.

Source: The authors.

Table 6. Regression results of grouping different subsamples of equity concentration.

Variable	Concentrated equity enterprises		Decentralized equity enterprises
	Coefficient	t	Coefficient	t
Pledge	−0.375	−1.012	−2.314***	−2.729
Sise	5.2269**	2.302	4.116**	2.234
Lev	−6.359***	−13.918	−6.109***	−14.049
Roa	25.925***	13.721	16.486***	8.269
Tobin’s Q	0.569***	3.970	0.502***	4.049
Age	−0.661***	−7.564	−0.946***	−10.339
Indep	3.143***	3.697	3.978**	2.477
Tang	−3.556***	−6.096	−0.793	−1.309
Board	2.898***	5.768	2.931***	5.670
Duality	0.163	1.052	0.268*	1.796
Constant	−14.951***	−8.143	−11.869***	−6.264
Year	Yes		Yes
Indu	Yes		Yes
Observations	2288		1939
R-squared	0.229		0.195
Adjusted R-squared	0.221		0.183
F	25.293***		15.897***

Note: ***, ** and * indicate significant at the level of 1%, 5% and 10% respectively.

Source: The authors.

Table 7. Summary statistics of enterprise innovation efficiency from 2014 to 2020.

Year	Mean	Max	Min	Std.
2014	0.298	1	0.107	0.138
2015	0.300	1	0.115	0.144
2016	0.303	1	0.114	0.146
2017	0.315	1	0.109	0.157
2018	0.303	1	0.114	0.147
2019	0.289	1	0.098	0.147
2020	0.275	1	0.091	0.139

Source: The authors.

Table 8. Robustness test results.

Variable	Full Sample	Non-SOEs	SOEs	Concentrated equity enterprises	Decentralized equity enterprises
Pledge	−1.227** (-2.015)	−4.328*** (-3253)	−0.356 (-1.305)	−0.525 (-1.013)	−3.307*** (-2.923)
Sise	6.718*** (2.926)	6.240*** (3.368)	2.257* (1.831)	5.039** (2.124)	5.080*** (3.183)
Lev	−5.004*** (-7.301)	−7.221*** (-6.101)	−4.121** (-2.234)	−6.729*** (-11.035)	−5.527*** (-7.146)
Roa	17.240*** (11.523)	8.239*** (14.021)	18.113** (2.252)	19.338*** (11.261)	16.970*** (10.024)
Tobin’s Q	0.572** (2.052)	15.110** (2.083)	1.334** (2.358)	0.536*** (3.025)	0.529** (2.101)
Age	−0.936** (-2.135)	−0.534** (-2.015)	−0.428* (-1.853)	−0.867*** (-6.362)	−1.685** (-2.290)
Indep	8.206* (1.789)	18.535** (2.404)	6.017** (2.330)	3.231** (2.030)	5.338* (1.861)
Tang	−2.923 (-0.275)	−2.838 (-1.235)	−1.719 (-1.420)	−3.062*** (-7.134)	−0.252* (-1.850)
Board	5.352*** (4.553)	2.782** (2.268)	3.753** (2.115)	3.779*** (5.825)	3.391*** (4.972)
Duality	0.137* (1.820)	0.231** (2.114)	0.087* (1.801)	0.367 (1.229)	0.185 (1.067)
Constant	−16.235*** (-11.021)	−15.357*** (-9.328)	−10.253*** (-8.157)	−16.393*** (-10.260)	−11.031*** (-7.008)
Year	Yes	Yes	Yes	Yes	Yes
Indu	Yes	Yes	Yes	Yes	Yes
R-squared	0.230	0.212	0.178	0.226	0.182
Adjusted R-squared	0.214	0.198	0.166	0.201	0.167
F	34.662*** (11.073)	27.273*** (9.079)	21.057*** (7.002)	27.935*** (9.580)	20.397*** (9.008)

Note: ***, ** and * indicate significant at the level of 1%, 5% and 10% respectively.

Source: The authors.

Table 9. Robustness test results.

Variable	Full Sample	Non-SOEs	SOEs	Concentrated equity enterprises	Decentralized equity enterprises
Pledge	−1.526** (-2.134)	−5.259*** (-3.772)	−0.463 (-1.331)	−0.758 (-1.124)	−3.119*** (-2.837)
Sise	6.039*** (2.768)	6.886*** (3.243)	2.997* (1.786)	6.829** (2.336)	5.273* (1.862)
Lev	−4.785*** (-8.159)	−7.081*** (-6.517)	−4.283** (-2.357)	−5.186*** (-12.027)	−5.007** (-2.312)
Roa	19.751*** (13.116)	7.995*** (15.036)	17.285** (2.346)	20.624*** (14.378)	18.296*** (9.112)
Tobin’s Q	0.572* (1.775)	17.676** (2.120)	1.382** (2.250)	0.771*** (3.296)	0.669** (2.210)
Age	−0.728** (-2.012)	−0.412** (-2.251)	−0.467* (-1.779)	−0.963*** (-6.447)	−1.115** (-2.007)
Indep	8.159* (1.714)	20.675** (2.342)	5.759** (2.253)	3.872** (2.258)	3.775* (1.861)
Tang	−3.056 (-0.437)	−3.527 (-1.010)	−1.975 (-1.358)	−3.788*** (-6.783)	−0.346* (-1.728)
Board	5.829** (2.336)	2.976** (2.457)	3.016** (2.426)	3.007*** (6.021)	2.896*** (4.882)
Duality	0.115* (1.892)	0.126** (2.015)	0.071* (1.857)	0.280 (1.125)	0.205 (1.534)
Constant	−18.397*** (-10.321)	−15.291*** (-9.273)	−9.328*** (-7.224)	−17.339*** (-9.276)	−15.628*** (-6.775)
Year	Yes	Yes	Yes	Yes	Yes
Indu	Yes	Yes	Yes	Yes	Yes
R-squared	0.221	0.206	0.166	0.243	0.179
Adjusted R-squared	0.198	0.187	0.152	0.229	0.166
F	40.195*** (10.337)	25.296*** (9.674)	20.168*** (7.157)	26.186*** (8.286)	19.375*** (9.163)

Note: ***, ** and * indicate significant at the level of 1%, 5% and 10% respectively.

Source: The authors.