The Impact of Insider Share Pledging on Financial Performance and Firm Value : Evidence from Korea

다국어 초록 (Multilingual Abstract)

This study analyzes the impact of insider share pledging on financial performance and firm value. Through firm-level and insider share pledging analyses, we find that firms with share pledging experience improvements in firm value despite no significant enhancement in financial performance after pledging. Also, there are reductions in earnings management and stock volatility. Additionally, insider share pledging generally strengthens these trends, but there are no significant results regarding stock volatility controlling for firm and year fixed effect. Our study is significant as it utilizes observations from Korea, where detailed disclosures allow for diverse collections, and utilizes a clear definition of insiders.

목차 (Table of Contents)

• Abstract
• 1. Introduction
• 2. Prior Research and Hypothesis Development
• 2.1 International Research
• 2.2 Prior Research in Korea
• 2.3 Hypothesis Development
• 3. Current Status of Share Pledging Systems
• 3.1 Share Pledging Systems in Other Nations
• 3.2 Korean Share Pledging System
• 4. Sample and research methods
• 4.1 Sample Selection
• 4.2 Definition of Insiders
• 4.3 Research Methods
• 5. Results of Firm-level Share Pledging Analysis
• 5.1 Analysis of Share Pledging Status
• 5.2 PSM Matching Quality and Difference Test
• 5.3 PSM Sample Basic Statistics
• 5.4 Correlations Between Variables
• 5.5 The Impact of Share Pledging on Financial Performance and Firm Value
• 6. Results of Insider Share Pledging Analyses
• 6.1 PSM Matching Quality and Difference Test
• 6.2 PSM Sample Basic Statistics
• 6.3 Correlations Between Variables
• 6.4 The Impact of Insider Share Pledging on Financial Performance and Firm Value
• 7. Additional Analyses Based on Earnings Management and Stock Volatility
• 7.1 Results of firm-level Share Pledging Analyses
• 7.2 Results of insider Share Pledging Analyses
• 8. Conclusion
• References
• Table