Research On The Stock-holding Impact Of Institutional Investors On Top Management Turnover

In recent years, the institutional investors have got rapid development in our country, and they gradually play a vital role in the capital market. In2000, China Securities Regulatory Commission (CSRC) claimed that "government will nurture and develop institutional investors unconventionally and creatively". Regulators didn’t change their determination to nurture institutional investors after a series of negative events. According to the report of State Council boost revolution opening and stable development of Capital Market, it points out that we should nurture some institutional investors and make them become the leading force in the capital markets. At the same time, institutional investors’ shareholding ratio is increasing gradually after a series of policies.More and more scholars begin to research institutional investors participating in corporate governance with the development of institutional investors. At the beginning, the way of researching is focus on learning theory and practice from overseas. Now academics have had thorough theoretical analysis and empirical research, it also shows that Chinese scholars have become mature in view of related studies.In numerous studies, there have been some controversies over the influence of institutional investors to participate in the governance of listed companies: whether institutional investors really involved in the corporate governance of listed companies? If they involved in corporate governance, did they play a positive role or negative role in corporate governance? And whether there are some differences when different types of institutional investors participating in the governance? Based on these controversies, it is necessary to research the influence of institutional investors participating in corporate governance from the perspective of top management turnover. At the same time, economic development speed in different regional is different, the progress of marketization is also different, so whether the progress of marketization will affect the corporate governance? It is worth researching in this paper.Based on these reasons, this paper probes into the following problems through theoretical analysis and empirical test:(1) What kind of role do institutional investors play in top management turnover because of poor performance,"Effective supervisors","bystanders" or" conspirators";(2) whether there is a difference about the influence of the different institutional investors on the company’s executives change?(3) Whether the progress of marketization influences institutional investors participating in top management turnover?This article is divided into six chapters, the research content is listed as follows:The first chapter is the introduction, this chapter briefly introduces the purpose of this paper, the research significance, research contents and main contributions.The second chapter is definition of relevant concept and related literature review. In this chapter, several related concepts are defined, including institutional investors, heterogeneous investors, corporate governance and top management turnover. At the same time, this chapter also analyzes the fundamental theory such as agency theory and ownership structure theory and reviews the related literature both domestic and abroad.The third chapter analyzes the theory about institutional investors influence on top management turnover and proposes corresponding hypotheses.The fourth chapter is study design, and mainly introduces the method of sample selection, data sources, and the reason of the variable selection. At the same time, this chapter is also modeling for related assumptions and explains the variables.The fifth chapter is the empirical test and results analysis. Descriptive statistical analysis is used to parsing base data. Correlation test is validated to verify the applicability of the model. Then Stata software is used to do the relevant empirical test. At the end of this chapter, the robustness test is used.The sixth chapter describes research conclusion of this article and puts forward the corresponding policy recommendations. At the same time, this chapter also provides the further research directions. The conclusions of this paper are listed as follows:(1)Institutional investors have played a positive role in top management turnover lead by poor performance.(2)Compared with pressure sensitive institutional investors, pressure resistant institutional investors can increase the probability of top management turnover result from poor performance.(3)Compared with the area in which the progress of marketization is slow, the fast region can promote pressure resistant institutional investors participating in corporate governance.The contributions of this paper are listed as follows:(1)This paper expands research field on institutional investors participating in corporate governance.(2)Based on the type of institutional investors, this paper finds that the different types of institutional investors have different influence on the decision about top management turnover result from poor performance.(3)This paper finds that the speed of the progress of marketization has an influence on institutional investors participating in corporate governance.Limitations of this paper are as follows:(1)In this paper, the research scope of top management turnover is limited to chairman of the board, general manager is not included because of the missing data in the database.(2)This paper weakens the effects of endogenous problems by adopting lag variable, but this does not completely eliminate the impact of the endogenous problems.