Abstract: Abstract：Controlling shareholders′ equity pledge has been widely used in China′s capital market. This high-risk financing mode will inevitably affect the investment activities and capital allocation efficiency of enterprises.This paper takes A-share listed companies in Shanghai and Shenzhen stock markets from 2009 to 2017 as the research sample, and uses multiple linear regression method to empirically test the impact of controlling shareholders′ equity pledge on the inefficient investment of enterprises.It is found that controlling shareholders′ equity pledge will significantly increase the inefficient investment. Further research finds that the degree of financial misallocation further aggravates the impact of the controlling shareholder′s equity pledge on inefficient investment; financial mismatches in different directions also have a differential impact :when the left misallocation, the controlling shareholder′s equity pledge leads to the problem of over investment, and when the right mismatches, it leads to the problem of insufficient investment.Therefore, it is necessary to standardize the motivation and behavior of shareholders′ equity pledge from the perspective of external supervision and internal governance of enterprises, restrain the encroachment of controlling shareholders, and give full play to the positive role of equity pledge; further deepen the understanding that financial mismatch aggravates systemic financial risk and its differential performance, adjust and optimize the structure of financial resource allocation, and improve investment efficiency.

Key words: controlling shareholder, equity pledge, non-efficiency investment, financial misallocation