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It is a common phenomenon for corporate insiders to pledge their stock as collateral for personal loans in China. Using Chinese data, this paper examines the effects of CEOs’ share pledge on the firms’ future innovation output. Evidence suggests that the existence of CEOs with share pledge has a significantly negative effect on firms’ innovation output. The baseline results are consistent with a variety of robust tests. Furthermore, we propose the effect of CEOs’ share pledge works on the corporate innovation through the market value management channel. Finally, we find that the good corporate governance is a possible channel to relieve the agency cost on CEOs.

Recently, the impact of share pledges on information disclosure of listed companies has been a hot topic. To explore the disclosure of the amount and tone of the R & D text information in the annual reports during the pledge period of the controlling shareholders’ shares, this thesis use python programming to crawl the R & D text data for the 2014-2021 annual reports of A-share listed companies. The study found that during the pledge of the controlling shareholders’ shares, the company will reduce the amount of R & D text information in the annual report and is more likely to disclose positive R & D text and cover up negative R & D information. The research conclusion of this paper has certain policy reference significance for regulatory authorities.