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Share pledging and non-financial corporations’ systemic risk contribution: Evidence from China

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  • Li, Shaofang
  • Tian, Sihua
  • Gu, Qinen

Abstract

Using the unbalanced data of 1714 listed firms between 2008 and 2019, this study investigated the impact of share pledging on the systemic risk contribution of non-financial corporations in the Chinese A-share market. Our findings confirmed that a higher level of share pledging is associated with a firm’s greater contribution to systemic risk in the stock market. By increasing firm risk and value and reducing firm profitability and information disclosure, share pledging is positively related to systemic risk. We also found a less positive relationship between share pledging and systemic risk contribution for state-owned enterprises. Moreover, after implementing new regulatory policies concerning share pledging, the positive effect of share pledging on systemic risk becomes less pronounced.

Suggested Citation

  • Li, Shaofang & Tian, Sihua & Gu, Qinen, 2025. "Share pledging and non-financial corporations’ systemic risk contribution: Evidence from China," Research in International Business and Finance, Elsevier, vol. 73(PA).
    • Handle: RePEc:eee:riibaf:v:73:y:2025:i:pa:s0275531924003970
    DOI: 10.1016/j.ribaf.2024.102604
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    More about this item

    Keywords

    Share pledging; Systemic risk contribution; Non-financial corporations (NFCs); Ownership; Regulatory change;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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