A Research Of Corporategovernance And Investor Confidence Index

Classic finance theory argues that under the assumptions of rational economic man, the markets are efficient. The price of the products depends on the result of the interaction of supply and demand, and risk of market is also the only factors that determine stock returns. However, it is not the fact, the investors in reality is not completely rational, their confidence, preference, expected relative rational always exists with obviously deviated, this also explained why financial markets occurred some phenomenon which cannot be explained with classic financial theory, such as: "flock effect" in the stock, the effect of small company, and calendar effect, the shares fluctuations after bulletin, non-rational financing behavior, and including closed Fund discount, Investors loss aversion, accounts, and so on. In order to reveal all kinds of irrational behavior in the market, financial economists added psychology to the traditional finance theory to form the behavioral finance. By introducing a non-rational behavior, behavioral finance based on traditional financial theory and put forward the idea:investor confidence will affect the effectiveness of market, so there are many phenomena which be contrary to the traditional finance theory. In view of this on the market, investor confidence is worth to study.Studies have shown that the confidence of investors would be under the influence of macroeconomic, peripheral markets and the development of the company, but if the corporate governance have an impact on investor confidence? Take the Bank and securities as example, first the paper introduced the research status of investors’confidence index, then selected 9 financial indicators, through main components analysis method, Eventually obtained the investors integrated confidence index of securities industry and banking in 2011-2013; in order to research the effect of company governance structure on investors confidence, this paper from three aspects which is company equity structure, Board structure and management layer incentive selected 5 governance indicators for researching, and the results showed that:company governance structure does will have an effects on investors confidence, and as for securities industry and banking, the governance structure factors which effects on investors confidence are different, but both the banking and securities industry showed that the largest shareholder which represent the concentration of ownership showed an inverse relationship with investor confidence.