This paper examines the impact of collateral shocks on corporate financialization using a sample of Chinese-listed firms from 2008 to 2021. We find a statistically and economically significant positive effect of collateral appreciation on financialization, consistent with profit-chasing motives, even after addressing endogeneity concerns. Additional tests reveal the effects are more pronounced among financially constrained, bank-dependent, and high-agency-cost firms. Financialization also elevates the risktaking and financial risks of firms. Overall, we provide novel evidence that collateral shocks stimulate corporate financialization, with implications for incentives, regulation, and systemic risk monitoring.