Empirical Study On The Influence Of Institutional Investor Holding Differences To Corporate Governance

In recent years, with the rapid development of our economy and the continuous improvement of the capital market system, institutional investors in the field of investment subject, proportion of shareholding, management scale and operation mode have made have substantial progress under the policy guidance from the regulatory and become a significant investment power in our capital market.As the increase of holdings and the deepening of market participation, the roles of institutional investors in the corporate governance mechanisms are discussed widely by the market parties and theorists. Some theorists believe, as abundant capital and professional decision-making system and mature philosophy, the participation of Institutional investors can alleviate corporate governance issues and Optimize the governance structure. But some other scholars’ conclusion show that the institutional investor shareholdings stimulate the short-sighted behavior of management layer, increase the management risk, and hinder the sustainable development of corporate governance. Facing two contrary conclusions about the link between institutional investor shareholdings and corporate governance, this article research through empirical method that the institutional investors holding and the differences impact on the governance of public companies which based public companies governance background and current situation of the development of institutional investors. First, this paper analyzes the problems existing in the governance of public companies and the present situation of the development of institutional investors in our country. Then this paper analyzes the factors from the macroscopic and the microscopic aspects that affect the institutional investors’decision-making and behavior, and divide institutional investors based on holding ratio, concentration, stability. Finally in order to study the link between the holding and differences and corporate governance, this paper select CCGI to be explained variable and data of A-share public companies from 2009 to 2011 year as the research sample.The conclusion shows that the governance level of public companies which stock is held by Institutional investors is significantly higher than no institutional shareholders of public companies’; Moreover, the active holdings of Institutional investor significantly improved the corporate governance, and negative holdings hindered the improvement of the corporate governance.