The Quality Of Information Disclosure, Institutional Investors And Corporate Performance

Along with the capital market gradually expanded, the listed company’s equity diversification degree is more and more high, the information asymmetry are growing, also the conflicts of interest between large shareholders and small shareholders and between shareholders and management, is becoming more and more serious. Institutional investors are emerging in this context, they shoulder the responsibility of protecting the interests of small investors and improving the management level of Listed company.In USA mature securities market, corporate governance oriented investment strategy of institutional investors have gradually become the mainstream, especially mutual funds, pension funds and other types of funds. Their investment philosophy gradually prefers corporate governance as a means to enhance the value and sustained the long-term return.China has been learning from the developed countries in terms of their corporate governance which focus on strengthening the supervision on the management of enterprises such as Britain and America. On the one hand, the institutional investors with holding more shares have motivation of protecting their own investment, and supervising the management. On the other hand, because with the independence, Institutional investors do not have the benefits of the company, Institutional investors can improve the corporate governance of the listed company.The role of institutional investors has been confirmed in American mature capital market. While Chinese capital market is relatively imperfect, institutional investors need to improve the protection of the interests of investors and the listed company management level. But because of the investment characteristics, fund has played a good role in Chinese capital market and effectively improved the performance of the listed company. Obviously, to promote China’s capital market, enhancement of the value selection and value creation of Chinese institutional investors is the important strategy. But we know that the main problems of institutional investors which participating in the corporate governance is information asymmetry. The improvement of corporate information quality can help to reduce the cost of institutional investors to participate in corporate governance and improve the return of the institutional investors to participate in corporate governance. The visible improvement of macro information environment in capital market can enhance motivation of the institutional investors to participate in corporate governance, reduce the difficulty to participate in corporate governance, and reduce the agency problem between large shareholders and small shareholders, shareholders and management, so as to improve the performance of the company.The idea of this research is based on the cost benefit analysis. The author thinks that the fund as the main body of the institutional investors has a stronger motivation to participate in corporate governance. Secondly, by using data of2003to2012A shares of listed companies from Shenzhen stock exchange as research samples, and through the construction of corporate governance model, this paper verified that the operating performance of the company (ROA, main business profit rate) and the shareholding proportion of fund is significantly positive correlation. The author also thinks that the high company’s disclosure quality can reduce the information asymmetry between internal institutional investors and companies, reduce agency problem between large shareholders and small shareholders, between the shareholders and the management, reduce the cost of obtaining information, and thus significantly strengthen the institutional investors to participate in corporate governance, and to further improve the performance of the company. To verify this factor of information quality, the author joins the product of the dummy variable of the quality of information disclosure and the fund shareholding proportion of the company in the first model, then the results verify the above hypothesis.The conclusion of this paper verified that the fund in our country can play a governance function, significantly improve the performance of the company. The quality of information disclosure is a significant influence factor of the fund to participate in corporate governance to improve the performance of listed company.This paper is divided into six parts:The first part is introduction which clarifies the background and the research value of this paper, briefly introduced the research contents and method, lists the research framework of this paper, and explains the research innovation and insufficiency of this paper.The second part is the literature review and comments which mainly collect and make comments for institutional investors to participate in corporate governance and information disclosure quality effects of corporate governance related literature.The third part is the theoretical analysis and the research hypothesis. First, through theoretical analysis, this paper proposes the mission, ability and motivation of institutional investors participating in the corporate governance, and proposes the impact of the quality of company information disclosure on institutional investors. Secondly, by focusing on the cost and benefit of the institutional investors to participate in corporate governance and the analysis of the effects of the quality of company information disclosure on institutional investors participating in the corporate governance, then this article put forward the research hypothesis.The fourth part is the research design. The author defines the research variables, and puts forward the construction and sample model selectionThe fifth part is the empirical analysis and results. This part mainly carries on the descriptive statistics for the overall sample, also do correlation test and test of multicollinearity, and regression analysis. Finally, by replacing variables, this paper does the robust test by replacing variables.The sixth part, mainly on the basis of the analysis of hypothesis and empirical results, summarizes the main findings of the study and put forward suggestions.