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Does share pledging affect workplace safety?

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  • Li, Kenuo
  • Zhang, Lijuan

Abstract

This paper explores the impact of share pledging on workplace safety. Using establishment-level data on workplace safety, we find that firms with executive share pledging exhibit higher workplace injuries/illnesses. Our channel analyses suggest that the higher injury/illness cases in pledging firms are associated with increased employee workloads and poor corporate safety cultures. Further analysis shows that the documented association between share pledging and workplace safety is weaker for firms that have more analyst coverage, face higher levels of pressure from labor unions, and operate in counties that have higher levels of social capital. Conversely, the association is more pronounced when firms meet or just beat analyst earnings forecasts and when CEOs are approaching retirement age. The results are robust to using injury rate as an alternative measure for workplace safety, controlling for accrual-based earnings management and financial constraints, and using firm-level analyses. Overall, our findings suggest a positive association between share pledging and compromised workplace safety, potentially driven by efforts to support short-term stock performance.

Suggested Citation

  • Li, Kenuo & Zhang, Lijuan, 2025. "Does share pledging affect workplace safety?," Journal of Corporate Finance, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:corfin:v:94:y:2025:i:c:s0929119925001014
    DOI: 10.1016/j.jcorpfin.2025.102833
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