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Performance and risk of energy industrial firms with stock pledge in China

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  • Ni, Zaiwen
  • Fang, Libing
  • Liu, Haiyue
  • Lu, Xinyu

Abstract

We investigate the effect of stock pledges on the firms' performance and risk in energy industry of China. The results show that the performance of firms decreases in the existence of stock pledge. Stock pledge generally decreases stock return volatility, except for the increase in forced liquidation pressure. Stock pledge increases downside risk and crashes. Finally, we demonstrate the different effects of the stock pledge in various regions of China.

Suggested Citation

  • Ni, Zaiwen & Fang, Libing & Liu, Haiyue & Lu, Xinyu, 2022. "Performance and risk of energy industrial firms with stock pledge in China," Finance Research Letters, Elsevier, vol. 46(PB).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pb:s1544612321004049
    DOI: 10.1016/j.frl.2021.102410
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    References listed on IDEAS

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    5. Li, Michelle & Liu, Chelsea & Scott, Tom, 2019. "Share pledges and firm value," Pacific-Basin Finance Journal, Elsevier, vol. 55(C), pages 192-205.
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    Cited by:

    1. Yan, Guan & Liu, Zhidong, 2023. "Interconnectedness of financial institutions based on pledged shares in China," Finance Research Letters, Elsevier, vol. 57(C).

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