An Empirical Research On Information Disclosure Of China’s Listed Companies Influenced By Institutional Investors

Under guidance of China’s government instructing concept about " developinstitutional investor to stabilize the market”, The scale and types of China’sinstitutional investors increasingly become large and more, and their owning stockratio in the listed company is also increasing day by day. Whatever as a investor byvoting with their feet or as the minority shareholders by voting with hand, the role ofinstitutional investors can not be overlooked. Meanwhile, in domestic academic, themechanisms of institutional investors joining in corporate governance and therelationship between and institutional investor and internal control and informationdisclosure has been becoming a research hot spot.We study the role of institutional investors from the perspective of Informationdisclosure. In theory, for the first, analyze of the current condition of development ofinstitutional investors and their basic characteristics; Secondly, analyze of theproblems existing in information disclosure system and information disclosure oflisted companies. In Empirical Analysis, we use three-year data from2007to2009ofShenzhen A’ shares listed companies, use Ordered Probit model to examine the effectof Least fund’s holdings,largest fund’s holdings and largest Institutional Investor’sholdings on the quality of information disclosure of listed companies, and test therelationship between these types of institutional investor’s holdings and informationdisclosure. The empirical results show that the effect of Institutional Investors on thequality of information disclosure is relevant to the rank of the proportion of shares inlisted companies held by one institutional investor in all institutional investors’holding proportion in listed companies. With have no economy effect of scale,thelast rank Institutional Investors are mostly for short-term speculative gain, unwillingto monitor the listed companies, with the increase of its stake, in order to get moreprivate interests, are more willing to support the listed companies to withholdinformation or deliberately misinterpret them to ordinary investors and confuse them,then take insider trading; Because the front stake of institutional investors’ equityshare of listed companies is quarterly big,higher the stake, the scale effect is moreobvious, they are more willing to supervise the listed companies, force executives ormajor shareholders of listed companies to improve the quality of information disclosure. With the improvement of the legal mechanism of China’s capital market,the possibility of that institutional investors and executives of listed companies ormajor shareholders conspire is reducing, and because its holdings is more haseconomy scale effect, so its stake is positively correlated to listed companyinformation disclosure quality but not significant.