Corporate Governance Effects Of Institutional Investors

Compared with individual investors, institutional investors have the advantage of profession and information. Recent years, with the development of capital market, the classification, amount and scale of China institutional investors have gained great achievement, more and more institutional investors have involved in corporate governance. The issue of corporate governance about institutional investors has become a hot research. There is no consistent conclusion about institutional investors have the effect of value-selection or the effect of value-creation. The major work of this paper is:Based on the summary of research of institutional investors and corporate governance, institutional investors and R&D expenditure,then we put forward to the research point of this paper.; Based on the modern housekeeper theory, the theory of corporate governance of institutional investors, we gives the simple station of the relationship of institutional investors and R&D expenditure, and put forward to the research hypothesis; Last, choosing the panel data of five years form A shares high technology and listed companies in China from 2010 to 2014. This paper use OLS method to study the relationship of institutional investors and R&D expenditure, use 2SLS and GMM mothod to control the endogenous, dynamic endogenous. Based on the results of empirical test,we can draw conclusions of this paper, and give the policy suggestions.Analysis and discussion of the results of the empirical test, we can find that:In the static model, the holdings of institutional investors have a significant positive effect on the R&D expenditure density, the relationship of the holdings of institutional investors and R&D expenditure intensity is insignificant, it is because marketing income is manipulated easily. In the endogenous model, the relationship of the holdings of institutional investors and R&D expenditure density or R & D expenditure intensity is more significant, the results of empirical tests illustrate the hypothesis of static model is not reasonable. They have the endogenous relationship. In the dynamic endogenous model, the holdings of institutional investors have a significant positive effect on the R&D expenditure, the higher the holdings of institutional investors, the higher the listed companies' R & D expenditure, institutional investors though its investment influence companies'R&D expenditure and may have the effect of value-creation. In order to play the positive role on institutional investors, and promote healthy environment for institutional investors' growth, we should diversify their investment by improving competition, establish a sound institutional investor evaluation mechanism.