Path And Performance Of Institutional Investors Involving In Corporate Governance In China

Since the mid-1980s, institutional investors of developed countries developed faster and faster. With the growing power of institutional investors, the ownership of listed companies began to change. Institutional investors gave up"the Wall Street rule"gradually, began to change from"with the foot voting"to"with the hand voting". Owing to this conversion, they are playing a more and more important role in corporate governance and have become an important force of corporate governance. Moreover, they are making the traditional pattern of corporate governance better. In our country, our stock market has been in circulation times after the reform of shareholder structure, which credits with many laws and regulations, promotes the development of institutional investors. As the main owners of outstanding shares, an increasingly important role of institutional investors can never be neglected.By the transmission mechanism, the paper analyzes institutional investors taking part in corporate governance. Why do institutional investors participate in corporate governance so actively? Why do we need institutional investors to improve corporate governance? How do institutional investors participate in corporate governance? How to impact on the performance of listed companies? Basically, the above problems constitute the main contents of the paper.The paper is based on the following logic to develop the viewpoints. First of all, on the basis of related theory and literature review, the paper analyzes the internal mechanism of corporate governance that institutional investors take part in. In order to illustrate the point that the motivation of institutional investors participating in corporate governance better, the paper is from three angles to explain the inherent driving force, which contain the analysis of costs and benefits, the rational decision-making model and game theory. Then, after analyzing the essential attributes of institutional investors and specificity of behavior of taking part in corporate governance, the paper illustrates the irreplaceable role of institutional investors in corporate governance. Next, the paper analyzes the path and performance China's institutional investors involving in corporate governance. After analyzing three paths, the paper makes use of quantitative performance and non-quantitative performance to check the influences that institutional investors participate in corporate governance. In addition, taking advantage of the empirical study, the paper tests the influences that institutional investors take part in corporate governance. In the course of analysis, the method of endogenous test can be used to analyze institutional investors'behaviors how to impact on the performance of listed companies. Last but not least, contrary to obstacles that institutional investors take part in corporate governance, the paper makes reasonable suggestions.The main contributions of this dissertation are as follows:Firstly, this paper offers evidences to further studies on the function of institutional investors participating in corporate governance, and provides the new support of empirical data.What's more, the paper considers the affects of the endogenous factors, and applies instrumental variables and simultaneous equations of two-stage least squares to make an empirical test of the relationship between institutional investors and the performance of listed company. Consequently, the results are precise and reliable.Lastly, this paper constructs the transmission mechanism by which institutional investors participating in corporate governance. It contributes to how to make institutional investors into corporate governance, and benefits to improve the governance structure of listed companies.