Abstract: this paper investigates the impact of controlling shareholder's share pledge on analysts acquiring information through site visit. This paper finds that analysts will reduce site visits for firms with controlling shareholders' share being pledged. This is because share pledge reduces analysts' information gaining through site visit. Managers of firms with controlling shareholders' share being pledged are more likely to use more positive tone to communicate with analysts. Thus the more site visits analysts conduct to pledging firms, the less accurate forecast they will make. Besides, the negative relationship between controlling shareholders' share pledge and analyst site visits is more pronounced in firms whose controlling shareholders face less internal, external supervision and higher risk of losing control rights. Furthermore, this paper also finds site visits for share pledge firms cannot improve corporate governance. Overall, this paper reveals that during the controlling shareholders share pledge period, site visits cannot help analysts obtain private information to cope with the pledge risk. Instead, site visits will be taken advantage by controlling shareholders as a powerful tool to conduct disclosure management and convey optimism to the market.

Key words: shares pledge, controlling shareholder, site visit, analyst forecast