The Research On The Institutional Investors, Equity Ownership Structure And Corporate Irregularities

Since the securities market of our country was established, the listed companies’ illegal events have never cut down. It not only affects the healthy development of securities market and hinders the efficiency of the optimal allocation of resources, but also infringes the legitimate rights and interests of investors to some extent, which affects their confidence in the securities market. Therefore face the violations of listed companies, governance violations of listed companies is imperative. Until now the internal governance structure of the company is still the key to research firm irregularities. A lot of researches have taken into research from ownership structure, board characteristics and audit committee, but the company irregular factors should not only focus on its own reasonable governance structure, more perspective should be put into the external governance factors. Institutional investors as a potentially influential groups of securities market, with the increasing stakes in the company, the action of the positive governance of listed company is growing, which in the research of the listed company illegal behavior is no doubt an important external governance factor. Therefore, this article selects dates of listed companies which chosen from A-share non-financial insurance in Shanghai and Shenzhen stock markets among 2011 and 2014 as samples. It stands from the perspective of institutional investors and ownership structure to study whether they have an inhibited effect on firm irregularities. At the same time, researches on the relationship between institutional investors and the violating behaviors have put under different ownership structures’ background, and further studies may be taken to explore whether they are influenced by ownership structure.Empirical studies have found that institutional investors’ holding stock has an inhibitory effect on the company irregularities. The higher institutional shareholding, the less company violation. The concentration of ownership structure also has significant negative correlation relationship with corporate violations. Further study found that the influence between institutional investors and company irregularities exist in different ownership structures. Through group inspections to the concentration of ownership found that in high ownership concentration samples, there is no significant correlation between institutional investors and company violations; in low ownership concentration samples, there is significant negative correlation between institutional investors and company violations. Visibly, equity concentration can play a preventive role to a certain extent, but over high ownership concentration will weaken the inhibitory effect on institutional investors and company irregularities, which is not conducive to the roles which the external governance factors play to company irregularities. Through group inspection to the nature of equity, found that in the state-owned holding company, institutional investors and corporate misconduct do not exist significant correlation relationship; In non-state-owned holding companies, there is an inhibitory effect between institutional investors and the company irregularities. So, this paper argues that the effective role of the institutional shareholders is actively under the influence of equity structure, and each company should choose proper ownership structure according to their own structure, which can avoid company irregularities occur through both internal and external factors.