The Research Of Institutionalinvestors' Impact On Business Performance And Corporate Fovernance In Personal Holding Companies

With the perfection and development of world's stock market, as the main part of the stock market, institutional investors'impact becomes increasingly clear. Nowadays institutional investors play more and more important roles, but academia still has different opinion of the importance of institutional investors. From reviewing documents of the relation among the institutional investors'shareholding, the corporate governance and the business performance, we think joining corporate governance is an effective way for institutional investors to have influence on the company business performance. So we aim at the proposition that institutional investors have influence on the company business performance through joining corporate governance, and analyze the proposition in theory and demonstration.In theory, we think the ultimate goal of institutional investors is realizing their maximum value. And this goal drives investor pursuing best company business performance. From the explaining of Principal-Agent Theory, as a shareholder of a company, the direct problem of institutional investors is to make the agency costs lowest. This problem drives investor to control company senior managers. So we think institutional investors should simultaneously pursue the best business performance and the lowest agency costs. From analyzing the inner link of this two goals, we find pursuing lowest agency costs is work for realizing their maximum value. So we should argue two problems as follow. We should argue that institutional investors simultaneously pursue the best business performance and the lowest agency costs through Cost-Benefit Theory. And we should argue that institutional investors join corporate governance is necessary to business performance's increasing through Behavioral Game Theory.In demonstration, we find that we should at first prove two propositions as follow to judge whether institutional investors can through joining corporate governance impact business performance. One is institutional investors' shareholding ratio has influence on company business performance. The other is institutional investors' shareholding ratio has influence on corporate governance level. After that we should argue a further inference:there is some connection between the aforementioned corporate governance index and business performance index. From arguing these propositions we can judge whether institutional investors can through joining corporate governance impact business performance. So our demonstration study can divide into three parts: finding the business performance index that institutional investors'shareholding ratio has influence on; finding the corporate governance index that institutional investors' shareholding ratio has influence on; correlation analyzing the aforementioned index and structuring regression equation.From theory and demonstration research, we consider the proposition that institutional investors can through joining corporate governance impact business performance not only has enough rationale, but also has strong demonstration test. So we think institutional investors really can through joining corporate governance impact business performance. And institutional shareholders mainly limit mangers' corrupt practice by the inspection capabilities of board of supervisors. And institutional shareholders apply themselves to enhance the market value of the company.