Research On The Influence Of Institutional Investors’ Shareholding Ratio On Banking Performance

In our country, in the commercial banks the proportion of the stocks of institutional investors is very big, and the stocks quantity they owns is growing with steady steps year by year. Institutional investors participate in the management of commercial banks is becoming inevitable choice and the tendency. Because commercial bank in our country develops swiftly and violently, the effectiveness of operation of commercial banks also unceasingly grows. Simultaneously, as a result the banking industry’s own particularity, its risk is bigger than other industries. Therefore, improves the management structure of banks and supervise the decision behavior of executives to enhance the security and profit ability has become an arduous and essential duty. Because the institutional investors prefer to the stable the bank stock development and good growth potential, the stocks proportion is growing unceasingly. Because the institutional investors take the stock of banks for large-scale and for a long time, therefore forced it to take seriously gradually to commercial banks’government, and take actively participate in the banks’ management and decision-making.Because of the commercial banks is a special business company, firstly this article makes a theoretical discourse and discuss of the relationship between institutional investors and corporation governance, the extend it to the impact of institutional investors’ownership on banking performance. But different from business companies that commercial bank also has its own particularity. The article selects 2009-2014 data of 16 listed banks in China. In the views of profitability, liquidity, security and growth this article establish a comprehensive performance which can estimate the banking performance. Through the research of the theory and hypothesis, the regression model is established. According to the results of regression the conclusion is drawn. The conclusion shows that institutional investors, overall, have a positive effect on the performance of commercial banks; In general, the first major shareholders have a positive impact on the banking performance, but this is an insignificant negative effect on the banking performance of the high degree ownership concentration; Compare the different type of the first major shareholders, the state-owned shareholders have more negative effect on banking performance than juridical person shareholders that as the first major shareholders; There is a mutual promotion between institutional investors and banking performance. According to the conclusions above, suggest the corresponding policy recommendations.This article is divided into four chapters in total as following:Chapter 1, introduction. Firstly, this chapter introduce the background and significance of this article. Second, introduce the literature review at home and abroad, there’re the connotation of institutional investors, the research status on banking performance and the research status on the impact of institutional investors and banking performance and introduce the endogenous problem. Then introduce the method and framework of this research. At last, describe the main work that done in this paper.Chapter 2, the theory and hypothesis of the relationship between institutional investors and banking performance. In this paper, the influence of institutional investors’shareholding on banking performance is divided into two aspects, cooperate governance and management. The way of the influence on the cooperate governance is mainly elaborated in two aspects of internal and external mechanism of the influence of institutional investors. In addition, this chapter indicate that the balance of institutional and major shareholder also influent banking governance. The first major shareholders is divided into two types, state-owned shareholders and corporate shareholders, to study the different effects on the banking performance. In the end of this chapter, the article combine the theory above to make the hypothesis of the relationship between institutional investors and banking performance.Chapter 3, empirical research of the relationship between institutional investors’ shareholders and banking performance. Firstly, the article make systematically discuss banking performance. Then, introduce the selection of variables and model of the article that will apply into empirical, also introduce the choice of the sample and source of the data. In the last of this chapter, this paper elaborate the detail process of the empirical. The empirical process is mainly based on the following points:first, this paper will make principal component analysis on dependent variable to ensure the synthesis-variable of the component analysis. Second, make unit root test and the choice of model type to the model above. At last, the article will make regression test according to the above and to study the endogenous between institutional investors and bank performance.Chapter 4, research conclusion and suggestion. In this chapter will make the conclusion according to the combination of the theory and the empirical results analysis. And put forward the relevant policy suggestions according to the conclusion above and the full text.