The Study Of Effects Of Domestic Institutional Investors On Stock Market Efficiency

Under the background of economic globalization, the division of the financial sector and the institutional investors had been classified more and more detailed. After the1970s, institutional investors began to stand on the stage of history, the role is more and more important. Actually, the process of the financial development is the process of growth of institutional investors, too. There is no doubt, institutional investors play an increasingly important role in the financial markets.Before the1990s, the academic study of institutional investor is very little. First Over the years, the Efficient Market Hypothesis(EMH) dominate the financial markets, behavioral finance is still not strong; second, as a independent financial entity, institutional is not strong enough. After the1990s, institutional investors play an increasingly important role in the global financial development, institutional investors are influencing the financial markets. The effect is multifaceted, in the process of designing the system, government must consider the significance of its existence, and institutional investors have a very significant and immediateness impact on financing of listed company. Finally, institutional investors are influencing the changes of price of stock market and other asset’s price. The change of the institutional investor is very rapidly in the course of global financial development, so that academia even had no time to study its possbile effects on the socio-economic.Recently years, studies of institutional investors gradually enriched,but the complexity and diversity of the financial markets makes it is still worth studying.The influence of institutional investors for the capital market efficiency is very complicated. The effect occurs from several aspects. Firstly, participating the company’s governance will improve the efficiency of capital market; Secondly, to some extent, the trading behavior can reflects part of the company-specific information. But there is also many acts that make the negative effect on the capital market,including short-term speculation on the company’s share price; herding of institutional investors, listed companies and fund managers may exist between the secret protocol about how to transfer the benefitsAll these show that the effectiveness of institutional investors to the market impact is very complicated, so that institutional investors to improve the efficiency of the market is not obvious. At the same time, those phenomenon indicate that institutional investors have an significant negative impact on market stability.