The Research On The Relationship Of Institutional Ownership And Market Reaction Of Earnings Report

Institutional investors are important participation group in capital market, and they exert a positive role for developing of capital market based on their economies of scale and information advantage and rational investment. Institutional investors have expanded greatly with the development of capital market of our country, which just is in underway phase. But there are negative effects in the development process of institutional investors at the same time, which make people prodece some questions to the effect of institutional investors. This dissertation select the companies coming into the market in Shanghai stock exchange to be swatch, and test the relationship of institutional ownership and stock market reaction based on earnings information. The purpose of this dissertation is proving that if institutional investors have advantage to get earnings informantions, if institutional investors could steady capital market by using their advantages, and if this effect could long keep. In order to prove these questions, this dissertation have raise three hypothesises and found two models. The major results are as follows:1,If institutional ownership is larger, the stock market reaction before earning informations have be promulgate will more strongly;2,If institutional ownership is larger, the stock market reaction after earning informations have be promulgate will less strongly in the short time;3,Institutional investors could steady the capital market in the short time after earning informations have be promulgaled. But this effect will disappear soon.The results of this dissertation fully show that instutional investors of capital market of our. country could take off the stock market reaction based on their advantage of getting earning informations. But this positive effect could not keep long time. Therefore, this dissertation puts forward that the aim of developping institutional investors has come true on a certain extent. But there also have some problems:institutional investors in our country has not achieve absolute rational, so interrelated supervisor should supervise the action of institutional investors availably. In this way, institutional investors will develop healthily and be goole for promoting capital market developping.