| In recent years, institutional investors have developed steadily and gradually,they become the backbone of the securities Market. By the end of2012, thepercentage of tradable A stock value China’s professional institutional investorsholdings is up to17.4%. In the past few years institutional investors maintain a " bodyforward, retail retreat" tendency. However, compared to Europe and other developedmarkets, the level of institutional ownership is still low. Professional institutionalinvestors is underdevelopment, it limits the ability to participate in corporategovernance. The impact of institutional investors growing companies, has become afocus of current academic research.Recent theoretical studies are mostly simple on the impact of institutionalinvestors and corporate performance relationship, without considering the impact ofinstitutional investors and corporate performance inherent mechanism of therelationship between the external institutional environment combine. Previous studiesshowed that institutional investors and corporate performance significantly positivelycorrelated, the institutional environment will improve corporate performance.State-owned shares of Chinese enterprises "dominance" resulting in " internal control"is serious, the second agency problem in our business was particularly prominent. Soin the current situation, institutional investors have a significant effect on corporateperformance, whether through an effective solution to the problem and improvecorporate agency business performance worthy of our consideration. Owning toeconomic development of the region and the market process imbalance, governmentintervences business operations in varying degrees, the institutional environmentinfluenced the development of enterprises significantly. How environmentaldifferences effect the relationship between institutional ownership and corporateperformance organizations worth further analysis.In this paper, we choose the Shenzhen A-share listed companies between2008-2010as the sample, using multiple regression model. First we test therelationship between institutional investors holding and corporate performance, then join the agency costs as a mediating variable to analyze whether institutional investorsthrough formation of agency costs effect on firm performance, which in turn regulatethe institutional environment for analyzing institutional investors and corporateperformance. Meanwhile, according to the different nature of the business, thesample was divided into state-owned enterprises and private enterprises. Theempirical results show that institutional investors will help improve corporateperformance, this phenomenon is particularly evident in the state-owned enterprises;however, agency costs did not play a significant intermediary role between the two.The study also found that among state-owned enterprises, market-oriented and locallevels of government intervention can be effective in promoting institutional investorsto improve the performance of the role. In the worse market-oriented, the lowerregion of the relationship between government and the market, institutional investorsimprove the performance more obvious, but there is no such relationship in privateenterprise. Conclusions drawn in this paper, not only enriches the theory of corporategovernance, improve the corporate governance structure of China and healthydevelopment and reform of state-owned enterprises, but also has a very importantpractical significance. |
