Financing Behavior And Performance Of The Qfii Shareholdings Of Listed Companies In China-related Research

The internationalization of capital markets in the world and China's entry into WTO make it an imperative trend for the opening-up of China's capital market to be gradual wide. As an innovative mechanism, QFII (Qualified Foreign Institutional Investor) System is easy for government to carry out foreign currency supervision and macro adjustments and controls, so China put the QFII System into practice as a transitional step to start the process of capital market opening. In the last few years, along with quickly expanding, institutional investors are not only the nucleus of the development of capital market every country, but also become more and more active in sticking up for their rights and obtaining long-term investment income through participating the governance of listed company. QFII System is widely adopted by boom-market, such as Korea, India and China Taiwan and it import the mature and advanced investment methods and opinions. The system of QFII has been carried out for more than five years in our nation, these qualified foreign institutional investors have been gradually gone deep into China's capital market as well, and the impact of their investing behavior on the entire market and companies has become more and more significant as the amount of their investment became larger. Therefore, besides the changes QFIIs bring to China's capital market, researchers have interest on whether QFIIs have any influence on the performance of listed companies in China.This paper firstly reviews the researches of predecessors on related subjects, which provide an essential theory basis for the following research, and then introduces the development of QFII System and foreign institutional investors in China. Next, compares the differences between foreign institutional investors and domestic investors and analyze the possible impact foreign institutional investors bring to corporate performance.In the empirical analysis, this paper investigates the relationship between foreign institutional investors and corporate performance. According to the results, the share of foreign institutional investors is obvious positive related with companies' achievement, but its relation with financing and dividend distribution is not strong. The findings show that foreign institutional investors do play a positive role to domestic corporate performance, but we can't exclude the possibility that foreign institutional investors choose those companies who has outstanding achievement to invest. Summarizing the full text, it appears that foreign institutional investors have not actively involved in corporate governance. The main reason lies in the short time QFIIs entered into China, the strict regulations on QFIIs and the inland capital market own regulatory.Finally, on the basis of the empirical research and literature, this paper suggests that QFII System should be improved to a larger extent to facilitate their involvement in corporate governance. In addition, this article also suggests China's government to promote the self-construction of China's capital market, and improve the quality of domestic investors, especially the quality of institutional investors.