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Controlling shareholder equity pledging, financing constraints, and corporate social responsibility

Author

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  • Xu, Jing
  • Luo, Qianfang

Abstract

This study investigates the intrinsic relationship between controlling shareholders’ equity pledges, financing constraints, and corporate social responsibility (CSR) using a sample of A-share listed companies from 2010 to 2020. The results indicate that equity pledges significantly exacerbate financing constraints, thereby weakening a firm's ability to fulfill its CSR obligations. Moreover, executive compensation incentives can partially alleviate the negative impact of equity pledges on CSR performance. Further analysis reveals that the effects of controlling shareholders’ equity pledges vary depending on industry type and the quality of internal controls.

Suggested Citation

  • Xu, Jing & Luo, Qianfang, 2025. "Controlling shareholder equity pledging, financing constraints, and corporate social responsibility," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002600
    DOI: 10.1016/j.frl.2025.106996
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    Keywords

    Controlling shareholder equity pledging; Financing constraints; Corporate social responsibility;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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