date: october 14, 2021
time: 10:30 am
venue: room 0411, teaching building 0#, jiuli campus
event details:
lecturer: assistant professor lin chubin
about the lecturer:
lin chubin, assistant professor and master supervisor, school of economics and management, southwest jiaotong university. in 2016, he obtained a ph.d. in financial management from national chengchi university, and then taught at the school of economics and management of southwest jiaotong university. from 2013 to 2014, he was invited to the school of business, george mason university as a visiting scholar. his main research and teaching areas are asset pricing, behavioral finance and corporate finance. his research results have been published in top international financial authoritative journals such as jfqa, jbf and jef.
about the lecture:
this study details an investigation of the relationship between controlling shareholders’ share pledge and (a) firms’ financial leverage and (b) the cost of debt. consistent with the literature suggesting that firms with controlling shareholders pledging their shares are associated with greater information asymmetry, we find that controlling shareholders’ pledging activity is positively related to a firm’s total debt ratio and cost of debt. further analyses show that better corporate governance and more firm transparency can alleviate these agency costs. finally, we find implicit government guarantees may play an important role in reducing these agency costs, as state-owned enterprises’ cost of debt is less affected by controlling shareholders’ share pledge. overall, this study provides support for the pecking order theory and proposes that controlling shareholders’ share pledge is an additional determinant of a firm’s capital structure and cost of capital.
