文献类型：期刊文献

英文题名：Does insiders share pledging stifle innovation? Evidence from China

作者：Wang, Qiong[1];Qiu, Muqing[2];Tan, Wenhao[3]

机构：[1]Fudan Univ, Sch Management, Shanghai, Peoples R China;[2]East China Univ Sci & Technol, Business Sch, Shanghai, Peoples R China;[3]Nanjing Univ Finance & Econ, Accounting Sch, Nanjing, Peoples R China

年份：2020

卷号：72

外文期刊名：INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS

收录：;WOS:【SSCI(收录号:WOS:000591270200007)】；

基金：We appreciate financial support by China Postdoctoral Science Foundation [Grant No. 2018M640353]; National Natural Science Foundation of China [Grant No. 71472138]; The MOE (Ministry of Education in China) Project of Humanities and Social Sciences [Grant No. 19YJC630133]. We are also appreciate and are thankful to the Fundamental Research Funds for the Central Universities [Grant No. WN1824001].

语种：英文

摘要：We examine the relation between insiders share pledging activities for personal loans and firm innovation. Firstly, we find a negative effect of both the existence of pledging and the intensity of pledging activities on firm innovation, measured by R&D and patent application. Pledging by insiders with decision rights is associated with a 4.6% decline in R&D activities and 0.5% decline in patent applications, respectively, which accounts for 4.0% and 10.6% of the mean of each variable. This result holds using a propensity-score matched sample. In addition, we instrument pledging activities by financing constraints faced by other firms controlled by the same controlling insiders who pledge shares. IV estimation yield similar results. Secondly, we find share pledge activities have more pronounced effect on firm innovations when firms are located in areas with strong property rights protection, when firms are non-SOEs, or when pledging insiders serve on corporate boards. Lastly, we also find a negative effect of share pledging of other firms with common shareholders on firm innovations of interest. Overall, our findings suggest that pledging shares by insiders stifle firm innovation because share pledging reduce insiders' preference for risk taking.