The Research On The Institutional Investor’s Influence To The Information Disclosure Quality Of The Listed Company

Information disclosure refers to the means by which listed companies provide information regarding their financial standing and business performance. As the capital markets in China continues to mature, investors are increasingly concerned with the information ecosystem of the capital markets, because information quality has an enormous impact on both investors’ and corporate management’s decision-making. Nevertheless, unscrupulous managers could manipulate disclosed information for self-gain at the backdrop of information asymmetry exists between shareholders and company management, to the detriment of the integrity of information. High quality information disclosure may reduce information asymmetry; for managers, information is the foundation on which a company operates. In recent years, the institutional investors have enjoyed remarkable success in the financial markets in China, due to the advantage of information access over other investors. As they take on a leadership role amongst investors, the institutional investors also play a central part in overseeing companies, safeguarding the interests of minority investors, stabilising markets and optimising the allocation of resources. Therefore, the research on the influence of institutional investors on the quality of information disclosure of listed companies could have a profound impact on protecting the interests of investors and safeguarding the development of capital markets.This thesis look the institutional investors as a whole to discusses the relationship between institutional investors and the information disclosure quality of listed companies so the result will be more wide application scope. From the theoretical perspective, based on relevant literature the research discussed related concepts and analysed relevant theories within the context of China. Furthermore, in view of theories such as agency by agreement, the incentives of the information disclosure size investor activism, this thesis also elucidates the motives of institutional investors’ influence on information disclosure quality, and the ways by which such an influence is exerted. In addition, between 2010 and 2013, companies listed in the Shenzhen Stock Exchange in which institutional investors were shareholders were used as sample data to investigate the relationship between institutional investors and the information disclosure quality of listed companies and to identify the influencing factors involved. Finally, recommendations for improving the relationship were made followed by suggested future research.