We investigate how controlling shareholders’ share pledging behavior affects a firm’s stock liquidity commonality. Using Chinese A-share market data from 2007 to 2020, we find that commonality in stock liquidity for firms with shares pledged by controlling shareholders is lower than for those without share pledging. We show that firms with controlling shareholders’ share pledging attract analysts’ attention and foreign institutional investors, which in turn can help reduce stock liquidity commonality. Furthermore, we find that controlling shareholders’ share pledging can increase stock liquidity commonality when the market experiences substantial declines, as share pledging can amplify investor panic selling during such periods
