The Impact Of Institutional Investors' Shareholdings On Stock Price Synchronicity Based On Cash Dividend Policy Of Listed Companies

Compare with the mature capital market, the stock market of china has a significant gap for the maturity of mechanism, laws and regulations and investors. As a result, the fluctuation of China's stock market is more jagged and the "rising and falling at the same time" phenomenon is more obviously, which not only increased market risks but also reduce the efficiency of allocating social funds, and greatly influence the healthy and steady development of the capital market. To promote rational investment and ensure market integrity, great efforts is made to develop institutional investor and the population and scale grows continuously in the recognition and support of the government. However, whether institutional investors play a positive role in stabilizing the market has been a hot problem. We think that institutional investor has two effects on stock price synchronization. On the one hand, their transactions affect the volatility of stock, on the other hand, they change "rising and falling at the same time" phenomenon by shareholding. The model of invest income can reduce the volatility of stock if it's long term investment.Based on the cash dividend policy, this paper analyzes institutional investors' effects on the stock price synchronization. Taking listed companies of Chinese A-share market from 2005 to 2014 as samples, the associations between the stock price synchronization and institutional investors'shareholders is studied. According to declaring the cash dividends or not, the samples are deviled into two groups and the associations between the stock price synchronization and institutional investors' shareholders of these two groups are tested.The results indicate that institutional investors shareholding will reduce stock price synchronization. From the aspect of dividend policy, institutional investors can reduce the stock price synchronization when cash dividends declared by listed company, otherwise, there is no effect.Whether the listed company adopts cash dividends policy or not directly impacts institutional investors'investment mode. In addition, the results shows institutional investors can reduce the stock price synchronization under positive dividend policy. Therefore, by improving the system construction of the securities market, we should optimize the structure and quality of institutional investors, and the system construction of the listed companies also need to be paid attention to.