A Study On The Impact Of Corporate Governance On Investor 's Confidence

Stock market investment has the Sheep-Flock Effect, so investors’ confidence relates to the stability and healthy development of the stock market. Therefore, what factors will influence the investors’ confidence? From behavioral finance research rise up to now, scholars research a lot of results of investor confidence. The functional mechanism of investors’ confidence is complicated with many influential factors. In general, the influence factors of investors’ confidence in micro level and macro level: a macro level is mainly affected by policy, our country as well as the present situation and future trend of development of the global economy, the international economic competition in the market environment, influence factors and complex; Micro level is usually the corporate level. This paper selects the factor of corporate governance level to investigate and study the great effect of corporate governance level evaluation on maintaining and increasing investors’ confidence from the perspective of investors. In recent years, academic circles and enterprise management focus on corporate governance problem, many research institutions have built their own corporate governance evaluation system, but these systems has not been widely used. Therefore, this study from actual conditions, combined with the existing corporate governance evaluation of research results, build corporate governance level comprehensive quantitative evaluation index, the application of rich corporate governance evaluation.Investors’ confidence is behavioral finance category, due to the traditional finance for the vision of some of the financial markets can’t explain, behavioral finance began to grow. Scholars at home and abroad based on the research of the investor confidence(sentiment), further analyzes its influence on investor behavior.In this paper, the method to measure investors’ confidence and corporate governance level is improved, and the data of A-share companies listed in Shanghai Stock Exchange of China in 2010-2014 is selected as the sample to analyze the panel data. The results show that, the higher the corporate governance level is, the stronger investors’ confidence is; investors’ confidence is also influenced by the macro level of the market and the nature of various industries is different, so significances of influences of corporate governance level in different industries on investors’ confidence are not the same. At the same time, the empirical results show that investors’ confidence has a positive lag effect.This paper content mainly includes the following six chapters:The first chapter, introduction. According to this article research background, research questions, and briefly expounds its research significance. Secondly introduced in this paper, research contents, research methods and research framework.The second chapter, literature review. From the perspective of the relevant corporate governance, investor confidence, literature, divided into the influence factors of corporate governance, corporate governance and investor confidence, summarized the relationship between the effects of the two parts of this paper, indicates that the research emphasis in this paper.The third chapter, theoretical analysis. First of all, this article related to the basic theory to comb; Secondly to define the connotation of corporate governance, investor confidence; Finally, based on the discussion above, from the Angle of theory to explain corporate governance influence on investors’ confidence, to lay the theoretical foundation of this article.The fourth chapter, the research design. On the basis of domestic and foreign literature, on the basis of theoretical analysis, put forward in this paper, the research hypothesis, and explain the definition of the screening principles of sample and variable, build relevant empirical model, is used to test the hypotheses proposed in this paper.The fifth chapter, the empirical analysis. First of all, according to the above analysis, determine the sample of the company’s corporate governance. Second, the descriptive statistics data of the sample. Based on the research of the fourth chapter proposed hypothesis, empirical test using empirical model, the system analysis of regression results.The sixth chapter, the research conclusions and policy recommendations. According to the result of empirical analysis, this paper research conclusion, and obtain about the governance of listed companies in our country enterprise, from the perspective of investors, the recommendations to perfect the relevant corporate governance, but also points out the deficiency of this article studies the existence.Through empirical research, this paper’s main conclusions are:First, based on the literature at home and abroad for reference, and relevant institutions, research institutes, etc, on the basis of research results, focus on corporate governance of nankai university evaluation system as reference, from the nature of the company governance and ownership concentration, board governance, management, protection of the rights and interests of the shareholders, the company from five aspects, such as information disclosure to select eleven specific variables, principal component analysis(pca) is used to calculate the sample the comprehensive level of corporate governance of the company. Draw the conclusion: the comprehensive governance of listed companies in China’s overall level is low, and there are large differences between individuals.Second, corporate governance and investor confidence has significantly positive correlation. Good corporate governance can better play to the internal system of the constraints of the ability, so as to better the function and behavior of the members of the enterprise, to some extent, can solve the problem of agency costs, prevent the self-interest behavior of management. Good corporate governance can convey to the world the benefit of the company information, makes the external stakeholders(investors) on the growth, the future development of the enterprise have stronger confidence. Further research also found that due to investors’ confidence is affected by the market macro level and so on, and the nature of different industries are different, therefore, different industry level of corporate governance affect investor confidence.Third, investor confidence has lag effect, early investor confidence, positive impact on the current investor confidence. Had a greater influence on the corporate governance of investor confidence, is to get investors to invest in future earnings, and one of the factors affecting the decision-making is the degree of confidence. Investors can get stock information is limited, therefore, corporate governance as the primary basis for the decision-making, affect investor confidence.