Controlling shareholder's equity pledge and corporate financialization

This paper selects China's A-share listed firms from 2011 to 2022 as a research sample to investigate whether the equity pledge behavior of controlling shareholders of listed firms has an impact on the financialization of firms. The study finds that equity pledges exacerbate the financialization of firms; investor sentiment plays a mediating role in the impact of controlling shareholders' equity pledges on firms' financialization behavior; and the correlation between controlling shareholders' equity pledges and firms' financialization is more significant in firms with lower financing constraints than in firms with higher financing constraints.