Pledging of personally held common stock is widespread in India, where pledging often serves as lender collateral for large shareholder and promoter personal debt acquisitions. This practice is exacerbated by high ownership concentrations in India, as promoters, often firm founders, control, on average, 51% of their firms’ equity. We examine promoter stock pledging impacts on stock volatility, capital investment decisions, and firm performance, using a sample of 1,452 Indian firms. We find that pledging relatively large proportions of outstanding shares and substantial proportions of shares held by promoters exacerbates stock volatility, fosters lower risk capital investments, adversely affects firm values, and impedes longer‐term performance.

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股票质押和公司风险：来自印度的证据

在印度，对个人持有的普通股进行抵押的情况十分普遍，那里的抵押通常用作大股东和发起人个人债务收购的贷方抵押。印度的所有权高度集中加剧了这种做法，因为发起人（通常是公司的创始人）平均控制着公司51％的股权。我们使用1,452家印度公司的样本研究了发起人股票质押对股票波动性，资本投资决策和公司绩效的影响。我们发现，对较大比例的流通股和发起人所持股份中的较大部分进行抵押会加剧股票的波动性，促进较低风险的资本投资，对公司价值产生不利影响并阻碍长期业绩。