Research On The Corporate Risk-Taking Affected By Stock-Holding Of Institutional Investors And Investor Protection

Income is always associated with risk. Only taking risk can enterprises get a high income likely. Studies have shown that corporate risk-taking is a necessary condition for long-term growth of enterprise value and economic development. In recent years, China’s institutional investors get rapid development, and their impact on corporate governance is generally concerned about the current academic. But there are few studies on the relationship between institutional investors and corporate risk-taking. Foreign researches also show that investor protection affect corporate risk-taking. In this paper, the research explores the effect of stock-holding of institutional investors on corporate risk-taking and the moderating effect of investor protection on the relationship between institutional investors’ shareholding and corporate risk-taking.Based on specimens A-share nonfinancial firms in China from 2004 to 2014, this paper discusses the relationship between institutional investors and corporate risk-taking. The results show that institutional investors especially independent institutional investors play a positive role in corporate risk-taking. Then, this paper shows that investor protection help to improve corporate risk-taking and have a positive moderating effect on the relationship between investor protection and corporate risk-taking. This paper also shows corporate risk-taking will promote corporate development.Finally, this paper put forward these measures:nation should develop institutional investors and regular the institutional investors’ behaviors; improve investor protection legal system and law enforcement; enterprises should pay more attention to the risky investment projects to maximize corporate value.