Institutional Investors On The Protective Effect Of Medium And Small Investors' Interests

In recent years, the investor protection, especially minority investor profit protection, become a hot issue in theory and practice. But the existing literature mostly study investor protection problem from the perspective of legal system, and the profit protection effect of firm ownership arrangement on minority investors is little considered.Based on Property theory, ownership and system affect the economic decision together. Institutional investors, as the important ownership arrangement, may affect the minority investor profit protection through its restricting effect on firm insiders from "tunneling", which may have great influence on minority investor protection. Especially since the 80s of 20th century, Institutional investor has developed quickly in the world, and become the important part of firm ownership structure, which may bring profound effect on minority investor profit protection. The existing literature on economic consequences of developing Institutional investors has no consistent conclusion. So it deserve research that could Institutional investor protect minority investor profit, and what is the condition in which it can have investor profit protection on minority investor. Based on the above consideration, this paper explores the interests protection effect of institutional investors on minority investors, and its system condition through theory analysis and empirical test in china system condition from the perspective of minority investors interests realization.The paper includes seven chapters. The first chapter put forward the research question, the research significance, the research content and the method, and the key concepts definition involved in the paper; The second chapter review on the representative literatures, which involves the study of investor protection, as well as the relevant documents of institutional investors, and based on the existing literature review, the chapter further deepen the research question. The third chapter is system background, reviewing and analyzing the research background and system related on the theme, and analyzing the background and characteristics of institutional investors to protect the minority investor interests. The fourth chapter indicates the interests protection effect mechanism of institutional investors on minority investors through theoretical analysis, and puts forward the research hypothesis combining with the Chinese system background. The fifth and sixth chapters empirically test the research hypothesis; finally, in chapter seventh, we summarize the main research results, and put forward the research weakness and further research direction.Through the research and analysis, we draw the main conclusions as follows:First, institutional investors may protect minority investor profit in given system conditions from the perspective of minority investor interests realization. Institutional investor, as important firm ownership arrangement, can promote the interests realization of minority investors through its value effect and information effect.Second, the profit protection effect of institutional investor to minority shareholders is affected by the system conditions. On the one hand, the scale and strength of Institutional investor affect this profit protection effect. The stronger economic strength and the bigger size of Institutional investor play greater effect .On the other hand, the ultimate control characteristic and area marketization degree of the listed company affect its effect, The listed company with state-owned control feature reduces the value effect of institutional investor, but enhanced its information effect; In the place where the marketization degree is higher , institutional investors can improve its value effect, but there is no evidence that it will affect the institutional investor's information effect; In the stock market decline period, institutional investors reduced the price volatility in the stock market, and in the market advancing period, institutional investors promoted the stock market volatility.The mainly contributions are embodied in the followings:First, extending the existing investor protection theory. Based on property right theory, the paper indicates that interests realization of minority investors is a effective perspective of minority investors interests research, and established the minority investors interests protection theoretical framework from minority investors interests realization perspective,which develop investor protection theory.Second, expanding the economic consequences research of developing Institutional investors. This paper discusses the interests protection effect of institutional investor to minority investor in the theoretical framework of investor protection, which extend the economic consequences study of developing institutional investor.Third, the empirical test results, in given system conditions, provide evidence of institutional investor protecting minority investor interests, which have policy meaning on how to develop and regulating institutional investors.