Abstract: Financing needs is an important problem of each listed company. When bank credit and major shareholder reduction are limited, capital market is not active, so the equity pledge with its unique flexibility, light assets becomes a preferred way for the controlling shareholder to ease financing constraint. This paper studies the impact of the equity pledge of controlling shareholder of listed companies in Shanghai and Shenzhen on the performance of the company from 2011 to 2015. The empirical results show that the controlling shareholder of private listed company is more likely to equity pledge than the controlling shareholder of the state-owned listed company; the controlling shareholder′s shareholding ratio is negatively correlated with equity pledge and is affected by equity nature, the controlling shareholder of private listed company is more willing to bet on gambling,leading to more significant negative correlation; the equity pledge of controlling shareholder is positively related to the performance of the company, and the relationship will be obviously different because of the different nature of the equity.

Key words: controlling shareholder, equity nature, equity pledge, corporate performance