Do insiders facing pledging risks make risky corporate investments? Evidence from Chinese M&As

References

• Almazan, A., A. de Motta, S. Titman, and V. Uysal. 2010. “Financial Structure, Acquisition Opportunities, and Firm Locations.” Journal of Finance 65 (2): 529–563. doi:10.1111/j.1540-6261.2009.01543.x.
   Web of Science ®Google Scholar
• Anderson, R., and M. Puleo. 2015. “Insider Share-Pledging and Firm Risk.” Southwestern Finance Association 2015 Conference.
   Google Scholar
• Arikan, A. M., and R. M. Stulz. 2016. “Corporate Acquisitions, Diversification, and the Firm’s Life Cycle.” Journal of Finance 71 (1): 139–194. doi:10.1111/jofi.12362.
   Web of Science ®Google Scholar
• Bhagat, S., N. Moyen, and I. Suh. 2005. “Investment and Internal Funds of Distressed Firms.” Journal of Corporate Finance 11 (3): 449–472. doi:10.1016/j.jcorpfin.2004.09.002.
   Web of Science ®Google Scholar
• Brown, S. J., and J. B. Warner. 1985. “Using Daily Stock Returns: The Case of Event Studies.” Journal of Financial Economics 14 (1): 3–31. doi:10.1016/0304-405X(85)90042-X.
   Web of Science ®Google Scholar
• Burkart, M., D. Gromb, and F. Panunzi. 1997. “Large Shareholders, Monitoring, and the Value of the Firm.” The Quarterly Journal of Economics 112 (3): 693–728. doi:10.1162/003355397555325.
   Web of Science ®Google Scholar
• Chan, K., H. Chen, S. Hu, and Y. Liu. 2018. “Share Pledges and Margin Call Pressure.” Journal of Corporate Finance 52: 96–117. doi:10.1016/j.jcorpfin.2018.08.003.
   Web of Science ®Google Scholar
• Dejong, D. V., K. Liao, and D. Xie. 2019. “Controlling Shareholder’S Share Pledging and Accounting Manipulations“ Available at SSRN 3274388.
   Google Scholar
• Demsetz, H., and B. Villalonga. 2001. “Ownership Structure and Corporate Performance.” Journal of Corporate Finance 7 (3): 209–233. doi:10.1016/S0929-1199(01)00020-7.
   Web of Science ®Google Scholar
• Dou, Y., R. W. Masulis, and J. Zein. 2019. “Shareholder Wealth Consequences of Insider Pledging of Company Stock as Collateral for Personal Loans.” The Review of Financial Studies 32 (12): 4810–4854. doi:10.1093/rfs/hhz034.
   Web of Science ®Google Scholar
• Fan, J. P., and T. J. Wong. 2002. “Corporate Ownership Structure and the Informativeness of Accounting Earnings in East Asia.” Journal of Accounting and Economics 33 (3): 401–425. doi:10.1016/S0165-4101(02)00047-2.
   Web of Science ®Google Scholar
• Fuller, K., J. Netter, and M. Stegemoller. 2002. “What Do Returns to Acquiring Firms Tell Us? Evidence from Firms that Make Many Acquisitions.” The Journal of Finance 57 (4): 1763–1793. doi:10.1111/1540-6261.00477.
   Web of Science ®Google Scholar
• Gul, F. A., J. Kim, and A. A. Qiu. 2010. “Ownership Concentration, Foreign Shareholding, Audit Quality, and Stock Price Synchronicity: Evidence from China.” Journal of Financial Economics 95 (3): 425–442. doi:10.1016/j.jfineco.2009.11.005.
   Web of Science ®Google Scholar
• Harford, J. 1999. “Corporate Cash Reserves and Acquisitions.” The Journal of Finance 54 (6): 1969–1997. doi:10.1111/0022-1082.00179.
   Web of Science ®Google Scholar
• Harford, J., and V. B. Uysal. 2014. “Bond Market Access and Investment.” Journal of Financial Economics 112 (2): 147–163. doi:10.1016/j.jfineco.2014.01.001.
   Web of Science ®Google Scholar
• Huang, Z., and Q. Xue. 2016. “Re-Examination of the Effect of Ownership Structure on Financial Reporting: Evidence from Share Pledges in China.” China Journal of Accounting Research 9 (2): 137–152. doi:10.1016/j.cjar.2015.11.001.
   Web of Science ®Google Scholar
• Jarrell, G. A., J. A. Brickley, and J. M. Netter. 1988. “The Market for Corporate Control: The Empirical Evidence since 1980.” Journal of Economic Perspectives 2 (1): 49–68. doi:10.1257/jep.2.1.49.
   Web of Science ®Google Scholar
• Jensen, M. C. 1986. “Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers.” The American Economic Review 76 (2): 323–329.
   Web of Science ®Google Scholar
• Krishnan, K. M., and R. Satish. 2016. “Investors Sentiments to Mergers Announcement & Stock Market Reaction.” International Journal of Applied Engineering Research 11 (2): 1266–1272.
   Google Scholar
• La Porta, R., F. Lopez-De-Silanes, and A. Shleifer. 1999. “Corporate Ownership around the World.” The Journal of Finance 54 (2): 471–517. doi:10.1111/0022-1082.00115.
   Web of Science ®Google Scholar
• Laverty, K. J. 2004. “Managerial Myopia Or Systemic Short‐Termism?” Management Decision 42: 949–962. doi:10.1108/00251740410555443.
   Google Scholar
• Li, C. Q., Y. K. Li, and M. L. Li. 2018. “Control Shareholder’S Share Pledge and Firms’Innovation Investment.” Journal of Financial Research, no. 7: 143–157.
   Google Scholar
• Li, S. M., Z. H. Huang, and J. Guo. 2020. “Capital Market Pricing and Corporate Acquisition Behavior: Evidence from Chinese A-Share Firms.” In Chinese: Economic Research Journal, no. 7: 41–57.
   Google Scholar
• Lin, C., Y. Ma, P. Malatesta, and Y. Xuan. 2011. “Ownership Structure and the Cost of Corporate Borrowing.” Journal of Financial Economics 100 (1): 1–23. doi:10.1016/j.jfineco.2010.10.012.
   Web of Science ®Google Scholar
• Lu, D., D. Huang, and D. Yang. 2019. “Board Powers of Non-Actual Controllers of State-Owned Enterprises and M&a Efficiency.” In Chinese: Management World 35 (6): 119–141.
   Google Scholar
• Ma, Q., D. A. Whidbee, and W. A. Zhang. 2018. “Noise Demand, Limits of Arbitrage, and Stock Price Bubbles: Evidence from Mergers and Acquisitions“ Limits of Arbitrage, and Stock Price Bubbles: Evidence From Mergers and Acquisitions (March 20, 2018).
   Google Scholar
• Moeller, S. B., F. P. Schlingemann, and R. M. Stulz. 2004. “Firm Size and the Gains from Acquisitions.” Journal of Financial Economics 73 (2): 201–228. doi:10.1016/j.jfineco.2003.07.002.
   Web of Science ®Google Scholar
• Moeller, S. B., F. P. Schlingemann, and R. M. Stulz. 2007. “How Do Diversity of Opinion and Information Asymmetry Affect Acquirer Returns?” The Review of Financial Studies 20 (6): 2047–2078. doi:10.1093/rfs/hhm040.
   Web of Science ®Google Scholar
• Morck, R. K. 1996. “On the Economics of Concentrated Ownership.” Canadian Business Law Journal 26: 63.
   Google Scholar
• Pang, C., and Y. Wang. 2020. “Stock Pledge, Risk of Losing Control and Corporate Innovation.” Journal of Corporate Finance 60: 101534. doi:10.1016/j.jcorpfin.2019.101534.
   Web of Science ®Google Scholar
• Rhodes-Kropf, M., and S. Viswanathan. 2004. “Market Valuation and Merger Waves.” The Journal of Finance 59 (6): 2685–2718. doi:10.1111/j.1540-6261.2004.00713.x.
   Web of Science ®Google Scholar
• Roll, R. 1986. “The Hubris Hypothesis of Corporate Takeovers.” The Journal of Business 59 (2): 197–216. doi:10.1086/296325.
   Web of Science ®Google Scholar
• Shleifer, A., and R. W. Vishny. 1989. “Management Entrenchment: The Case of Manager-Specific Investments.” Journal of Financial Economics 25 (1): 123–139. doi:10.1016/0304-405X(89)90099-8.
   Web of Science ®Google Scholar
• Shleifer, A., and R. W. Vishny. 2003. “Stock Market Driven Acquisitions.” Journal of Financial Economics 70 (3): 295–311. doi:10.1016/S0304-405X(03)00211-3.
   Web of Science ®Google Scholar
• Tang, W., X. X. Xia, and F. X. Jiang. 2019. “Share Pledging of Controlling Shareholder and Corporate Financial Constraints.” In Chinese: Chinese Accounting Research, no. 6: 51–57.
   Google Scholar
• Wang, X. Y., C. Y. Ouyang, and Z. Y. Shi. 2018. “Controlling Shareholder’s Shares Pledge，the Risk of Losing Control Rights and Tax Avoidance.” In Chinese: Economic Research Journal, no. 1: 138–152.
   Google Scholar
• Wangerin, D. 2019. “M&a Due Diligence, Post-Acquisition Performance, and Financial Reporting for Business Combinations.” Contemporary Accounting Research 36 (4): 2344–2378. doi:10.1111/1911-3846.12520.
   Web of Science ®Google Scholar
• Xie, D. R., D. J. Zheng, and C. Y. Cui. 2016. “Is Controlling Shareholder’s Share Pledge a Potential“ Mine ”?” Management World 5: 128–140.
   Google Scholar
• Yaghoubi, R., M. Yaghoubi, S. Locke, and J. Gibb. 2016. “Mergers and Acquisitions: A Review. Part 1.” Studies in Economics and Finance 33 (1): 147–188. doi:10.1108/SEF-03-2015-0078.
   Web of Science ®Google Scholar
• Zheng, G. J., D. J. Lin, and B. Lin. 2014. “Controlling Shareholders’Financial Constraints， Tunneling and Firm Value: From the Perspective of Stock Pledge.” In Chinese: Journal of Management Sciences in China 17 (9): 72–87.
   Google Scholar
• Zhu, P., V. Jog, and I. Otchere. 2014. “Idiosyncratic Volatility and Mergers and Acquisitions in Emerging Markets.” Emerging Markets Review 19: 18–48.
   Web of Science ®Google Scholar