The Positive Research Of Institutional Investors And Corporate Governance In China

Institutional investors are not only the nucleus of the development of security market every country, but also the important factor for the optimization of corporate governance. The dissertation aims at the listed companies which institutional investors hold in China, and makes a study of the behavior that institutional investors participate in corporate governance and the behavior reaction of listed companies. The main contents are as follows:Chapter one firstly analyzes the unique position of institutional investors in security market, then explores the international differences which occur when institutional investors participate in corporate governance, and hackles the system track of the development of institutional investors in China. Hereon, it further analyzes the study limitation of institutional investors` participation in corporate governance in academia, thus laying foundation for the theory, system and literature of this dissertation. Although that institutional investors participate in corporate governance is the result of market competition, the support of relevant systems is necessary. The development of institutional investors in China benefits from the gradual healthiness of law, which provides a system guarantee for institutional investors` participation in corporate governance in China. However, few people make a study of the behavior of institutional investors` participation in corporate governance in Chinese specific situation at home and abroad.Chapter two mainly seeks for the direct and indirect evidence of institutional investors` participation in corporate governance in Chinese security market. Although the time for the development of Chinese security market is comparatively short, and the development of institutional investors even shorter, institutional investors now and then participate in corporate governance with their strong desire, as can be seen as direct evidence. By analyzing the relationship of the amount of stocks held by institutional investors and No. 1 stockholder, we penetrate the will of institutional investors` participation in corporate governance, as can be seen as indirect evidence. All above can prove that institutional investors participate in corporate governance of listed companies.In Chapter three, the approaches by which institutional investors participate in corporate governance are explored. Due to the particular position of institutional investors in corporate governance, there are two behaviors for institutional investors to participate in corporate governance: one is shareholder`s activism; the other is pessimism. In this way, we explore nine approaches with which institutional investors participate in the corporate governance. These approaches are open suggestion, trade supervising, organizing the alliance of institutional investors, lawsuits, exerting rights of vote, putting in resolution of stockholders, collecting rights of vote via attorney, communicating with manager and letters for explanation. In view of the limitation of these above approaches, we bring forward ecological ideas of corporate governance, that is, institutional investors should take an active part in system construction of corporate governance, such as accounting standard, corporate governance`s standard, which purposely help institutional investors participate in corporate governance better and protect the rights of small and medium sized stockholders, who include institutional investors themselves.In Chapter four, a focus is on the behavior reaction of listed companies that institutional investors participate in. Institutional investors` participation in corporate governance influences the behaviors of listed companies, especially three main behaviors: fundraising behavior; information disclosure behavior and earnings management. Institutional investors give a deep influence on those behaviors. When listed companies take action, they think much of institutional investors` will. Meanwhile, we find out that institutional investors have different behaviors in different market situation. For example, in Bull stock market and Bear stock market, institutional investors influence listed companies differently. In Bull stock market, the pressure of payoff for them is comparatively small, so their tendency to give pressure to manager on earning management is small. In Bear stock market, both institutional investors and manager of listed companies need to attract investors by earning management, thus the tendency to give pressure to manager on earning management is relatively clear. These findings help provide scare evidence for exploring institutional investors` behaviors in different market situation and provide a good foundation for management department to set down policies.Chapter five analyzes the influences of listed companies` achievement because of the institutional investors` participation. The study finds out that the share of institutional investors is obvious positive relativity with Tobin`Q of listed companies at 5% the level, also same with CoreROA except for specific years. All can be used to prove institutional investors` influences on the achievement of listed companies. The findings show that the reverse"U"type relationship exist between the share of institutional investors and Tobin`Q, which shows that security market in China has a comparatively strong speculation. Besides, the convergence of share can improve achievement of corporate; although market does favor to the effect of financial leverage, the rigidity of debt leaves a heavy load for company`s running.The last Chapter draws a conclusion and gives suggestions for the development of institutional investors.