Research On The Corporate Governance Effect Of The Institutional Investors’ Competitive Behavior Over Information

According to the theory of corporate finance,the high proportion of institutional investors brings about the motivation and ability of shareholder activism.To a certain extent,it solves the problem of "free rider" in the process of shareholder activism in the process of the diversification of ownership.However,the incentive of shareholder activism among institutional investors is not completely consistent.For some institutional investors,free rider may also be its rational choice.Especially under the assumption of institutional investor heterogeneity,the logic of a single institutional investors "equity proportion is higher,activism and stronger motivation" is not valid in the proportion of equity collection.Therefore,the traditional research on the total shareholding ratio of all the institutional investors can not accurately measure the positive motivation and the effect of the shareholding institutions.There will also be a question of how to effectively form shareholder activism in the ownership of institutional investors.According to the informed characteristics of institutional investors,there is a certain degree of antagonistic relationship between institutional investors based on the private information trading gains.It is called institutional investor information competition.Compared with the proportion of the total shareholding,the institutional investors’ information competition is more accurate to answer the question of the collective action of the institutional investors,the problem of the income of the additional equity transaction and the liquidity problem.Therefore,it is more accurate to describe the motivation of institutional investors’ activism.It affects the choice between the positive and the transaction behavior.Different corporate governance effect is formatted.Based on the mechanism analysis of corporate governance,this paper empirically examines the effect of managerial constraints,performance and stock price on the information competition of institutional investors.An empirical test on the effect of managerial constraints is based on the relationship between institutional investors’ information competition and earnings management.Performance effect is based on the relationship between institutional investors’ information competition and yield index.The stock price effect is based on the relationship between institutional investors’ information competition and the risk of stock price collapse.The empirical results show that there is an inverted U shape relationship between institutional investors’ information competition and earnings management,and there is a U-shaped relationship with corporate performance.However,there is a positive relationship between institutional investors’ information competition and stock price risk.Taking into account the earnings management of listed companies will be conducive to the improvement of corporate performance and the risk of the stock price collapse is a comprehensive reflection of the direct and indirect governance of the institutional investors and the transaction behavior,therefore,the three basic empirical conclusions have a certain degree of consistency.Based on the empirical results,the following conclusions are drawn.Firstly,the positive incentives brought by the information competition factors of the institutional investors will have a governance role.However,in the different stage of fierce competition of institutional investors,institutional investors’ enthusiasm is different.Second,the information competition behavior of institutional investors will have a significant impact on the risk of stock price collapse.The more intense the information competition is,the greater the risk of collapse.In other words,large institutional investors focus on information will play a role in stabilizing the market.Third,the information environment factor is an important factor which influences the corporate governance effect of competition behavior of the institutional investors.Fourth,the mechanism of corporate governance plays a more important role in the way that institutional investors’ information competition affects the risk of stock price collapse.The conclusion of this paper is helpful for the small and medium shareholders to understand the corporate governance role of institutional investors.It will also provide some guidance for institutional investors in the choice of activism and trade in the complex ownership structure.It will also provide a new train of thought for the regulatory authorities to develop policies,strengthen the relevant policies of listed companies and the relevant policies of market stability.