Study On The Impact Of Investor’s Structure On Stock Market Volatility Of China

Stock market is an important part of capital market and the stock market of a country plays an important role in its economic development. However, the dramatic volatility of the stock market is harmful to the capital market and even the whole social and economic life. Therefore, keeping the volatility of stock market within reasonable limits and maintaining the stability of the stock market is always an important regulatory target to the stock market. Since1970s, with the development of the financial markets of developed countries, institutional investors developed rapidly and became the major investors on the international stock markets. In1993, our country allowed securities firms into the stock market as the first institutional investors. After20years of development, the structure of investors on stock market has changed a lot and the pattern of investors’ diversification initially formed. It is important for the development of our stock market to explore the impact of the changing of investors’ structure to the volatility of stock market.Firstly, this paper describes the current situation of investors’ structure on stock market and the stock market volatility of China. Secondly, this paper analyses the approaches of the investors’ structure affects the stock market volatility theoretically through three aspects:the difference of information, capital and trading level. And then we explore the impact of investors’ structure to the stock market’s volatility by the econometric methodology based on the macro view. In this paper, the investors in our stock market are divided into legal persons, professional institutional investors and individuals. The empirical research of this paper is carried out from two points:the market traders point and the market scale point. The empirical research from the first point explore the shareholding ratio, the quantity accounting, the volatility of shareholding ratio and the volatility of quantity accounting of three types of the investors in our stock market respectively and get some conclusions as flows.(1)The relationship between the shareholding ratio of legal persons and the stock market volatility is negative, and so as to the relationship between the quantity accounting of professional institutions investors and the stock market volatility.(2) The relationship between the volatility of shareholding ratio of legal persons and the relationship between the volatility of shareholding ratio of professional institutional investors are positive. The empirical research from the second point explore the influence from the scale of institutional investors on stock market volatility and find that the development of institutional investors has increased the volatility of our stock market in fact. Finally, we analyze the results of the empirical study and put some proposals to improve the investors’structure on our stock market.