The Research On Herd Behavior Of Institutional Investors Based On The Angle Of Stock Price Synchronicity

Since 1998 when the first fund company was established, institutional investors represented by the securities investment funds have got rapid development. The development of institutional investors and its impact on the capital market has always been the focus of academic circles. Institutional investors can use their professional advantage to invest stocks of long-term investment value, which can help promote the healthy and orderly development of capital market. However, with the outbreak of the financial crisis, there also has a view that 'her d behavior' of institutional investors in times of financial crisis will intensify the risk, becoming a booster in capital market and increasing the exposure and diffusion of financial risk. Under this background, the analysis of whether Chinese institutio nal investors have herd behavior as well as it belongs to which kind of herd behavior has a certain practical significance.The article elaborates the institutional investors 'herd behavior' and the connotation of stock price synchronicity and its measurem ent method. First this paper introduces the concept of 'herd behavior' and causes of institutional herd behavior; then analyzes the meaning of the stock price synchronicity and its relationship with information efficiency of stock price. Based on this, we will use the classic LSV herding behavior model to calculate the values of institutional herding behavior on Chinese stock market with the sample data of 424 listed companies from 2009 to 2013;at the same time, the asset pricing model will help to calculat e the goodness of fit of related stocks, and achieves the annual values of the stock price synchronicity after conversion. After get the values of research variables, herd behavior and stock price synchronicity will be set to explain variable and be explai ned variable respectively, and then select five control variable including the volume, leverage ratio, return on equity, asset size and QFII to establish regression equation. Then we uses the fixed effects model to operate the panel regression, after that, the impact factor of each variable will be obtained respectively. Finally, the empirical results are analyzed. According to the empirical results, some policy suggestions are given from the perspective of the external environment and internal environme nt to guide the healthy development of institutional investors, hoping that institutional investors can develop healthy in our country's securities market development, and play their role of professional investors to stabilize the market and the improve the m arket efficiency.