An Empirical Study On Institutional Investors And The Fraud Of Listed Companies

The healthy development of Listed Corporation has a great influence to our capitalmarket and investors. But the fraud incidents happened frequently during the recent yearswhich not only stopped the development of the capital market, but also decreased theinvestors’ passion and destroyed the market discipline. At the meantime, as the institutionalinvestors’ development in the last ten years, it has become so powerful that it can’t be ignored.This makes the research on the relationship between the institutional investors’ and the fraudsof Listed Corporation become an important topic.The essay will discuss the relationship between the institutional investors’ and the fraudsof Listed Corporation from theory and empirical side separately. In theory, it analyze Chineseinstitutional investors’ temporary development and the frauds of the Listed Corporation on thebasis of the principal-agent theory and institutional shareholder activism, and thendemonstrate the main character of different types of the institutional investors and themotivations and ways that influence frauds of the Listed Corporation. As for empirical side,using the SPSS18.0and the data of Shanghai and Shenzhen A-share Listed Corporation from2007to2011as sample, and adopting logistic regression model to test the relationshipbetween the institutional investors and listed companies. Through the empirical analysis teststhat the institutional investors can restrict the frauds of Listed Corporation, the functiondepends on the types of the institutional investors, and then tested different institutionalinvestors to draw the conclusion: the overall institutional investors and active institutionalinvestor ownership concentration have a great effect on the fraud of the listed companies,which shows that the institutional investors’ intervention has the restriction on share. However,the negative institutional investor and uncertain institutional investors have little influence. Atlast, the essay will sum up all the results form the empirical analysis and give relevant policyand suggestions and the restriction of the essay.