Research On The Impact Of QFII Shareholding On Corporate Behavior

Economic globalization is a requirement of the development of the trend of the times.China's initiative and orderly expansion of opening to the outside world conforms to the law of economic development and conforms to the trend of the times.With the gradual deepening of China's capital market opening,it will build bridges for foreign investors to invest in the domestic market and play a positive role in building a diversified capital market.As an important measure of opening up,the QFII system plays a pivotal role.On December 1,2002,China formally formulated the "Interim Measures for the Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors"(hereinafter referred to as the "Measures")to provide policy support for attracting foreign investors to invest in the mainland capital market.The "Measures" have been continuously revised,improved,and supplemented,and the QFII investment quota limit will be lifted after approval in September 2019,opening the policy door for foreign investors to participate in the Chinese market in depth.In the course of rapid development in the past three decades,although the scale of listed companies in my country has continued to expand,the total market value has also increased exponentially.However,with the rapid development of my country's capital market,problems that hinder the healthy development of the capital market have gradually emerged.The requirements for building a modern economic system and promoting high-quality economic development have not been met.Increasing non-investment efficiency problems,declining risk-taking capacity and frequent frauds have severely restricted my country?s economic development and hindered the normal operation of the capital market.Guiding listed companies to improve investment efficiency will promote high-quality economic development.As of the end of 2019,my country's total investment in fixed assets for the whole society was 551,478.00 trillion yuan.Although the investment volume is huge,the problem of low investment efficiency still exists.As the main body of the micro-economy,the investment efficiency of listed companies is directly related to the process of high-quality economic development in my country.The company screens the investment project decisions,but the management abandons projects with investment value but higher risks due to factors such as short-sightedness or risk aversion.This makes companies miss out on development opportunities and also reduces their investment efficiency.Therefore,improving the risk-taking capacity of listed companies will not only improve the investment efficiency of the company,but also promote the long-term development of the company.Corporate frauds is an unfavorable factor that endangers the healthy development of an enterprise.In the process of enterprise development,management often violates rules out of self-interest.Reducing corporate frauds has a profound impact on the normal operation of the capital market and can also promote the sustainable development of enterprises.This requires listed companies to change their business philosophy,enrich investor diversification,and obtain reverse technology spillovers,that is,to improve their own productivity and management level by learning foreign advanced technology and experience.As the main component of overseas investment entities and institutional investors,QFIIs are mostly internationally renowned institutional investment companies with strong financial strength,accumulated rich management experience and investment philosophy with a global perspective.Therefore,QFII's market participation has injected fresh blood into enterprises and can influence their behavior.The research purpose of this article is to explore the impact of QFII shareholdings on corporate behavior from the level of business activities,so as to understand the effect of QFII shareholdings on corporate development.In the past,QFII focused on the research on corporate governance and corporate performance,and seldom linked QFII shareholdings with the operating activities of listed companies.Although,in recent years,some scholars have gradually turned their attention to the research of QFII shareholding issues,in order to dig deeper into the impact of QFII shareholding on business operations,reflecting the increasingly important role of QFII in the development of my country?s capital market.However,there are relatively few research literatures on the influence of QFII shareholding on corporate operations.Problems such as low investment efficiency,reduced risk-taking capacity,and frequent frauds have gradually emerged,hindering the further improvement of the quality of listed companies.This article tries to study the impact of QFII shareholdings on corporate investment efficiency,risk-taking,and corporate frauds of the company?s investment efficiency,risk-taking,and corporate frauds in combination with my country?s listed company governance development practices.Theoretical support and new empirical evidence.To this end,based on the existing research results,this paper combs the relevant literature on QFII shareholdings and corporate governance,explores the role of QFII shareholdings in corporate management,and adopts a combination of standardized research and empirical research.Taking QFII shareholdings as the starting point,and use the shareholding ratio of less than 5% and the shareholding ratio between 5%-30% and QFII as the proxy variable among the top ten shareholders of the company,from the three aspects of investment efficiency,risk-taking,and corporate frauds.Analysis from different angles.QFII's shareholding is between 5%-30% and QFII,as the top ten shareholders,pursues long-term investment and has the characteristics of a strategic investor.Specifically,in terms of investment efficiency,using the relevant data of China's Shanghai and Shenzhen A-share listed companies from 2008 to 2018 to conduct research to empirically test the impact of the company's QFII shareholdings and QFII checks and balances on investment efficiency;In terms of risk-taking,we used the relevant data of China's Shanghai and Shenzhen A-share listed companies from 2008 to 2019 to conduct research to empirically test the impact of QFII shareholdings and QFII checks and balances on risk-taking;In terms of corporate frauds,we use the relevant data of China's Shanghai and Shenzhen A-share listed companies from 2008 to 2019 to conduct research to empirically test the impact of QFII shareholdings and QFII checks and balances on corporate frauds.The main conclusions are as follows:(1)QFII shareholdings can improve the efficiency of corporate investment.The study found that: QFII shareholdings and QFII checks and balances can significantly reduce corporate inefficient investment and improve the investment efficiency of listed companies;for state-owned,small-scale,and eastern companies,QFII shareholdings have a positive correlation with investment efficiency More significant;in addition,this article uses the instrumental variable method to alleviate the endogenous problem between QFII shareholdings and investment efficiency,and make the article?s conclusions more reliable.The mechanism test shows that QFII shareholdings can reduce the agency cost of enterprises and improve the enterprise.The two paths of information disclosure quality jointly affect the efficiency of corporate investment;after further refining the Malmquist index,they return to find that QFII shareholdings mainly improve corporate technical efficiency.(2)QFII shareholdings can increase the risk-taking capacity of corporates.The study found that: QFII shareholdings and QFII checks and balances are positively correlated with the enterprise's risk-taking,that is,QFII shareholdings increase the company's risk-taking;QFII shareholdings and corporate risk-taking are in state-owned enterprises,small-scale enterprises,and a higher degree of marketization The positive correlation between regions is more significant;after using the instrumental variable method and the robustness test,it is found that QFII shareholdings can still increase the company?s risk-taking capacity;the mechanism test shows that QFII shareholdings can improve corporate information transparency and ease corporate financing constraints.The path collectively affects the enterprise's risk-taking capacity.(3)QFII shareholdings can help reduce corporate frauds.The study found that: QFII shareholdings and QFII checks and balances are positively correlated with the corporate frauds,that is,QFII shareholdings reduce the corporate frauds;QFII shareholdings and corporate frauds are in state-owned enterprises,with a high degree of equity concentration and a relatively high degree of marketization.The positive correlation in high areas is more significant;after using the instrumental variable method and the robustness test,it is found that QFII shareholdings can still reduce the corporate frauds;the mechanism test shows that QFII shareholdings can improve the internal control of enterprises and alleviate corporate financing constraints.These paths collectively affect corporate frauds;further subdividing various forms of frauds have returned and found that QFII shareholdings can improve the quality of corporate information disclosure,improve corporate governance effects,and reduce corporate frauds.Based on the research results of this article,this article proposes the following policy recommendations:(1)Promote the diversification of corporate investors and improve the company?s equity structure;(2)Relax the main restrictions on foreign institutional investors and allow foreign institutional investors to participate in operations in more areas Management;(3)Increase the proportion of QFII shares held by state-owned enterprises and help state-owned enterprises reform;(4)Build a docking platform between small-scale enterprises and QFII,so that small enterprises have more opportunities to introduce QFII;(5)Encourage and support the central and western regions and northeast regions to attract foreign investment;(6)Build a market-oriented business environment and create a good business environment.In general,the above conclusions show that QFII has a special position in business activities,and QFII shareholdings will have an important impact on the behavior of enterprises.The innovation or contribution of this article may lie in:(1)Clearly put forward the impact of QFII shareholdings on the operating activities of listed companies.In the past,the analysis of institutional investors often started from the whole.This article took a different approach and specifically examined the impact of QFII shareholdings on the specific business behavior of enterprises.This is of great significance for further understanding the influence of QFII shareholdings in corporate behavior.Deepen the understanding of the impact of QFII shareholdings on the operating behavior of listed companies.Effectively supplement the research on the economic consequences of enterprises introducing QFII.(2)The research of this article has further enriched the relevant literature of QFII.The previous literature mainly analyzed corporate behavior from the aspects of management,political connections,financing constraints,governance structure,information disclosure,and social responsibility,ignoring the impact of foreign investors as the capital market opened up.Based on the perspective of QFII,this paper finds through empirical research that QFII shareholdings can affect the business behavior of enterprises.This expands the scope of QFII research and provides a theoretical basis for deeper opening up.In short,in the context of economic globalization,the opening of capital markets has promoted sustained economic development.The promulgation and implementation of the QFII system is also another substantive measure for China to expand capital opening.QFII shareholdings can exert governance and information effects,which is conducive to reducing corporate information asymmetry and actively playing an internal supervisory role.While restraining and restraining the behavior of managers,it effectively alleviates the problem of enterprise entrusted agency and improves the level of corporate governance.QFII shareholdings have improved corporate investment efficiency,enhanced risk-taking capabilities,and reduced corporate frauds.The above results verified the effectiveness of QFII's internal and external governance.It provides empirical evidence for the influence of QFII shareholdings on business operations,and illustrates the important role and significance of QFII shareholdings.