The Research Of The Impact Of Institutional Shares To On Listed Companies

In recent years, with the rapid rise of institutional investors,they have become the dominant force in the domestic capital market. In fact, institutional investors are an important force affecting corporate governance, and began to produce a greater impact on Chinese corporate governance. Many studies show that institutional ownership of the performance of listed companies have a positive correlation studies have shown that this is a negative correlation between the two. So how institutional ownership on the performance of listed companies what kind of impact, in particular how it affects; and I think will be useful in institutional ownership on performance affect the company conducted a thorough study of this issue in order to give the majority of investments provide theoretical and practical guidance, so this research has important practical significance.This paper defines the definition and scope of institutional investors, then combined with the status at home and abroad, pointing out our institutional investors regarding the performance of listed companies to research common problems and deficiencies. The institutional investors affect the company’s performance and study the reasons for the complexity are expounded by basic theory. Besides, according to the theory of institutional investors in the way affect the company’s results were discussed. Finally, empirical research hypothesis of this paper and draw conclusions and recommendations.It obtains there resulted as follows through empirical research:1.he higher the proportion of institutional investors hold stocks, the better the performance of listed companies have.2.The higher the degree of institutional investors balance the corporate largest shareholders, the better the performance of the listed companies have.3.With the institutional investors holding stocks, the higher the concentration of stock ownership is, the better the performance of the listed companies have.4.Compared to the state-controlled listed companies, the impact of institutional investors holding stocks on the corporate performance is more significant than that ofthe non-state-controlled listed companies.In this paper, three contributions have been made through the review of the theory of the correlation between the corporate performance and the institutional ownership, and the empirical study of the correlation.First is the creative selection of instrumental variables. Scholars used to use two methods to study the relationship between the institutional ownership and the corporate performance. First one is to directly draw conclusions after regression without endogenous considered. Second one is to do the two-stage least squares regression after the elimination of endogenous by a tool variable, usually stock turnover. Bases on the possible endogenous causality between the institutional ownership and the corporate performance, the same two- stage least squares regression analysis has been used. However, the selection of instrumental variables is quite different compared to the previous study. The proportion of institutional investors holding stock has been considered as an instrument. The transfer of this instrument variable to an endogenous one by constructing a model for one-stage least squares regression, eliminates the endogenous problems to ensure the reliability of the conclusions.Second is the innovative model. The previous researches have focused on the equity concentration and the corporate performance, which mainly study the correlation between the level of the ownership concentration and the corporate performance through direct regression. This paper has studied the correlation between the corporate performance and the ownership concentration, and found that the higher the concentration of ownership, the easier the major shareholders are against the interests of minor ones, which makes the poor corporate performance. However,after the institutions hold the stocks, they can play a good role in the supervision and management. In this case, the higher the concentration of the ownership, the more obvious role the institutional investors play, and the better performance the companies have. Hence, after the institutional investors join in the corporate governance, the ownership concentration has a positive effect on improving thecorporate performance and the equity structure of listed companies in China, which has important practical significance.Third is the innovative in research content. Scholars used to use two methods to study the relationship between the institutional ownership and the corporate performance. The paper studies the relationship between the agency ownership concentration and corporate performance, noting that high ownership concentration of listed companies, large shareholders often for their own gain, often take a series of initiatives to damage the interests of minority shareholders, to the detriment of the company’s performance. Institutional investors to participate in small shareholders to reduce free-rider phenomenon, not only can play the role of supervision of major shareholders,but also may be with major shareholders to jointly govern the business.Therefore, after institutional investors to participate in corporate governance,ownership concentration has a positive effect on corporate performance, the conclusion of China’s listed companies to improve the ownership structure has important practical significance. Besides compared to that the most scholars treat controlling shareholders just as a control variable,this paper has use the nature of the controlling shareholders as an explanatory variable, and sets the appropriate model to study the influence of the institutional ownership on the corporate performance under different controlling shareholder nature.