| Equity concentration and the problem of agency is the hot subject in the nearly10years. La porta (1999)&Claessens (2000) found that most company of the world is highly centralized.Even in the United States which is equity highly decentralized, its companies are also centralized. In the mode of concentratied equity, the controlling shareholders of a company are the actual managers. On the one hand, Controlling shareholders effectively relieve the conflicts between of management and external investors,on the other hand,the Controlling shareholders led to the new agency. The separation between Control and cash flow right lure the controlling shareholders encroach on small and medium shareholders with various kinds of tunneling way. In China, most of the listed companies are state-owned enterprise. It is means that most t companise of China are Equity concentratied. Since the1980s, more and more tunneling remind us that it is the serious problem, tunneling event has harmed the interests of small and medium shareholders, and go against the orderly development of the capital market. This shows that find the balances the mechanism for tunneling, is still the corporate governance hot spot.How to effectively reduce the principal and agent of the difference between interests, is an important problem. In the1980s, institutional investors state their role of corporate governance. The phenomenon are concerned by scholars. In the United States, institutional investors began to give up Wall Street criterion which means "voting with their feet", and t participate in the company management actively. Since the1990s, under the guidance of the "extraordinary development" policy, institutional investors in China were developed greatly. However, There are an controversial about whether institutional investors play an active role in corporate governance, and can eliminate the tunneling. This paper will focus on the problem of tunneling, research the role of institutional investors in Corporate governance, then put forward the suggestion to promote the development of institutional investors.The thread of this paper is:firstly, reviewing of previous literature and theory, t analysis the causes,conditions and obstacles of institutional investors balance controlling shareholders, then examining empirically the the role of institutional investors in balancing tunneling.Specifically, the arrangement of this paper are as follows:The first part is the introduction. This part first expounded the research background and significance. Then introducing the train of thought and basic framework. Finally, pointing out the the contribution of this paper.The second part is the literature review. In this chapter, we are reviewed the related literature of institutional investors and tunneling. By analyzing previous literature, we found that there is few literature from the perspective of the tunneling and institutional investors. So we define the the research direction of our research.The third part is the theoretical analysis..In this chapter, we analysis the causes,conditions and obstacles of institutional investors balance controlling shareholders.The fourth part is the research hypotheses and variable design. In this chapter, we start examining empirically the the role of institutional investors in balancing tunneling.We chose " Occupation of funds" and " Security Association" as proxy variable of tunneling.Then chose " Other receivables/total assets " to measure the extent of the " Occupation of funds", then chose " The amount of Guarantee Association/net assets" to measure the extent of" Security Association".by doing this,we began to examining empirically the the role of institutional investors in balancing tunneling.The fifth part is the empirical results and analysis. In this chapter, through statistically analyzing the collection of data, we examining empirically the the role of institutional investors in balancing tunneling.The last part is the conclusion and suggestions, In this part,we sums up the main conclusion of this paper:first of all, institutional investors have active corporate governance utility, and can inhibit the tunneling of Controlling shareholders. But different types of institutional investor make different roles in inhibit the tunneling. In China,securities investment funds, securities companies, the social security fund and QFII can inhibit the tunneling of Controlling shareholders. Insurance company, enterprise annuity and financial companies have no inhibition, even sometimes, they paly the role of conspiracy of Controlling shareholders. In addition, the inhibition of institutional investors are influenced by the system environment.In the state-owned enterprise, the inhibition of institutional investors are restricted. Then based on the empirical study results, we put forward the suggestions that are about the further development of Chinese institutional investors.The main contributions are following as:Firstly, past research about institutional investors and tunneling are generally separately, and few deeply discuss the relation between them. Even if there are some articles, the empirical research data are old. So our paper has great theoretical and practical significance.Secondly, we chose new date for our stay. The sample of our stay is interval from2007to2009, equity division reform was basicly completed, the shareholding percentage of institutional investors are more close to idealLevel.Thirdly, discuss the different roles of different institutional investors utility in inhibiting tunneling.The last contributions is that we analyzed the influence of enterprise property rights for institutional investors inhibition effect. It may rich the research of institutional investors. |
