Empirical Research On The Influence Of Features Of The Investment Institutions On Effectiveness Of Internal Control

As the capital market maturing, the internal control of listed companies has attracted wide attention at home and abroad research scholars. Especially after the 2008 White Paper on China’s internal control of listed companies publish, researchers easier access to internal control effectiveness of quantitative data, which again led to the study of internal control boom. National internal control studies have focused on the effectiveness of internal control factors, and aspects of corporate governance, corporate performance, research on the relationship between institutional investors feature and the effectiveness of internal control is not much. Institutional investors as the backbone of the securities market, which have specialized investment management, investment behavior standardization, the investment portfolio of the structure, etc., can significantly improve the effectiveness of internal control of listed companies.This paper study the impact of institutional investors on the internal validity characteristics. Through analysis the research results, proposed four characteristics of institutional investors, which are the type, stake, the investment ratio and spatial distance. on this basis, this paper according to securities and investment funds, pension funds, QFII, brokers and brokerage collection of financial, insurance companies, investment companies, commercial banks, trust companies, eight kinds of institutional investors, respectively establish models of internal control effectiveness, And using 2014 top ten shareholders of listed companies in Shanghai and Shenzhen regression data, draw conclusions. This paper argues that the proportion of shareholding, investment ratio, spatial distance three features of institutional investors have a significant impact on the effectiveness of internal control, and eight types of institutional investors to influence the effectiveness of internal controls can be clearly divided into two types. One are active institutional investors(QFII, social security funds, securities investment funds, brokerage and collection of financial brokerage, insurance companies) holdings, they can make the effectiveness of internal controls of listed companies significantly increase; the another are passive institutional investors(investment companies, commercial banks, trust companies) holdings, there is no significant impact on the effectiveness of internal control. In real life, individual investors investment decisions can be based on the top 10 shareholders of listed companies in the feature information of institutional investors.This article uses Coval and Moskowitz approach to institutional investor data. Especially in terms of calculating the distance of space, call Baidu Maps API interfaces to determine the latitude and longitude of listed companies and institutional investors. Then the earth approximate a sphere to calculate the spatial distance of listed companies and institutional investors.The innovation of this paper is that there is few literature research on spatial distance characteristics of institutional investors. This paper first put country’s securities market as a sample, empirical research on institutions investors feature affect the effectiveness of the internal control of listed companies, to evaluate the effectiveness of the internal control framework constructed to provide a new theoretical basis.