The Impact Of Foreign Institutional Investors To Corporate Governance And Performance Upon The Compare Of China And Korea

China must open its capital market on the way of economic development. In 2002, China put the QFII (Qualified Foreign Institutional Investor) System into practice as a transitional step to start the process of capital market opening. Besides of making changes on the equity shares, foreign investors are also considered an impetus on improving domestic companies' corporate governance. What kind of role foreign institutional investors will play to Chinese boom-market becomes an important question. Also as a boom-market in Asia, Korea began its process of capital market opening as early as 1980s, so its experience of foreign institutional investors to corporate governance is very useful to China for reference.Based on researches of predecessors on foreign institutional investors and corporate governance, this paper firstly analyzed the relationship of foreign institutional investors and corporate governance and performance. Then it compared the systems of importing foreign institutional investors between Korea and China, and also expatiate its effect in Korea and gave its forecast in China. After the theoretical analysis, this paper made a positive analysis on the impact of foreign institutional investors to corporate governance and performance respectively in Korea and China. According to the results, foreign institutional investors do play a positive role to domestic corporate governance and performance. However, it was showed that foreign institutional investors gave pressures to adjust corporate governance with international measures in Korea's practice. Besides, this paper elucidated some demerits in China's model from data and the short time QFII entered into Chinese capital market. As last, this paper gave some inspirations for the practice of QFII system in China.