Taking Chinese A-share listed companies from 2013 to 2021 as samples, this paper qualifies the effects of controlling shareholders’ equity pledges on corporate frauds. The results show that controlling shareholders’ equity pledges significantly induces firms to engage in non-compliance and increased the pledge ratio, and disclosure fraud has a greater impact.

In recent years, the frequent occurrence of non-standard defaults of local government financing vehicle (LGFV) has aggravated the risk of local government implicit debt.

The key from statistical inferring cause and effect inference is to effectively solve endogenous problems. Limited by data acquisition, a large number of research problems in the field of management still need to be carried out in non -experimental data, so endogenous problems are particularly obvious.