Research On The Development Of Institutional Investors And Herding Behavior

In major global stock markets,the trend of securities investment institution is more and more obvious. Institutional investors are developing rapidly and they have become the main force of the securities market. In China, the influence of institutional investors is increasing; the structure of institutional investors is changing rapidly. Especially in recent years, with the relaxing of relevant policies, insurance funds,the social security fund,QFII and enterprise annuity are growing, and the entry of QDII, China has basically formed diversified structure of institutional investors.With the developing of institutional investors, the research on them is further, especially herding behavior of institutional investors. A large number of theory and empirical studies show that institutional investors will influence the existence of herding behavior and the stability of the securities market. With the development of global economic integration, the herding behaviors on institutional investors have broadened and deepen its scope. Therefore, the research on herding behavior of institutional investors has very important theoretical and realistic significance.This paper firstly summarized the research of home and abroad, and then introduces the related theory of institutional investors and herding behavior. It point out that herding behavior of institutional investors has adverse effect on small investors, and it will make the stock market and the financial markets unstable. And with the development of institutional investors, herding behavior has an adverse effect. In the empirical test section, using the method of LSV and its correction method, testing on the sample of securities investment fund, and also on the open-end fund and closed-end fund sample, the conclusion is that herding behavior existing in stock markets of China.Finally, according to the actual conditions of our country, raise some suggestions to reduce herding behavior of the securities market: perfect securities market information disclosure system,building a diversified investors system,accelerate the securities market of financial innovation,improve the quality of listed companies,improve the legal and strengthen supervision,establish a scientific and reasonable evaluation system of institutional investors.