Recently, a paper titled Share Pledging and Corporate Misconduct, co-authored by Professor Xu Sheng from the School of Finance at Zhongnan University of Economics and Law, was officially published in The British Accounting Review.

ABSTRACT

We investigate and find a significant and positive relation between share pledging by controllingshareholders and the likelihood of corporate misconduct, The results remain robust after classifying misconduct into accounting and non-accountingmiscon-duct,and misconduct receivingsevere and light penalties, Alleviation of financial constraints, inflation of stock prices, mitigationof margin calls, and expropriation under poor corporate governance are the main motives forcorporate misconduct by firms with pledging controlling shareholders, The positive relation between share pledging and corporate misconduct propensity remains after accounting for endogeneity issues, political connections, intensified bank monitoring, and share repurchasers.

Keywords:Corporate misconductShare; pledging Controlling shareholders; Pledging deregulation

Author Profile​

Xu Sheng is a Professor and Doctoral Supervisor at the School of Finance, Director of the County Economy and Financial Engineering Research Center at Zhongnan University of Economics and Law, Executive Dean of the Fintech Research Institute, and Deputy Director of the Hubei Collaborative Innovation Center for Industrial Upgrading and Regional Finance.