Analysis Of The Effect Of Institutional Investors Participating In Corporate Governance

Due to reasons such as the split shares, Chinese listed companies faceserious problems of the single-large shareholder. And institutional investors to spreadthrough ownership stake and participate in corporate governance is not only the phases of thesecurities market, is also the necessary selection for institutional investors. Especially afterthe reform of the split shares, institutional investors’ speaking right is growing constantly,the position of institutional investors is on the rise. Whether from the perspective of externalsupervision or from the perspective of participating in internal corporation governance,institutional investors have played a positive role.This article research selects763state holding listed companies as the empirical analysisobjects exchange from2004to2012. COMPEN combined with MBR and ROE areintroduced as the explained variables. It mainly analyzes the effect of institutional investorsparticipating in corporate governance. The study finds that:(1) In the state holding listedcompanies, institutional investors participating in corporate governance can play a positiverole, and institutional ownership relative to the controlling shareholder’s stake is higher, thepositive role is more obvious;(2) By comparing the regression results before and after theshare reform, the author finds that the data after the share reform are improved—the positive correlated coefficient’s value is increased and the negative correlatedcoefficient’s value is decreased.On the basis of the study, the author proposes that improving the governance of state-ownedlisted company can be come true by institutional investors. But only one of the elements cannot work, it requires not only the growing scale of institutional investors to build adiversified institutional investor base, improve capital markets to create a relaxedenvironment for investment, but also need strict monitoring of investment institutions,stimulate healthy competition between them and accelerate the pace of circulation topromote the reform of SOEs further. The study of this paper may improve the ownershipstructure of our countries’ state-owned listed companies after equity division reform andprovide the reference to the corporate governance.