Institutional Investors,Marketization And Performance Forecasts

Institutional investors own abundant capital and solid professional foundation,and they can improve corporate governance with both direct and indirect ways.The establishment of system of performance forecasts indicates China’s promotion in information disclosure level,which represents corporate governance to some degree.There are lots of scholars exploring the relationship between institutional investors and information disclosure before.Growth enterprise market founded in 2009 is a newly developing part of security market in China.Lower enter requirements and high investment risk lead to more strict supervision on it.Notice issued by Shenzhen Stock Exchange in 2012 makes annual performance forecasts compulsive for companies in growth enterprise market.Moreover,a memorandum released at the same time gives more specific and accurate regulations on it.Therefore,this research examines the relationship between institutional investors and corporate performance forecasts,and it also adds marketization to find the evidence of its moderating effect.Here are the findings of this paper:the more equity ratios the institutional investors hold,the more accurate and timely the performance forecasts will be.But there is no evident relationship between institutional investors and the optimistic tendency.In the group of lower marketization,there are significant relations between equity ratios of institutional investors and some traits of performance forecasts.No significant results are found in the group of higher marketization.Fund can improve both the accuracy and timeliness of performance forecasts,however,broker has a negative influence on timeliness.Moreover,trust can promote the optimistic tendency.This paper finds that the more equity ratios the institutional investors hold,the more positive effects they exert on corporate governance.Government should further improve laws and regulations,and advocate the positive impact on growth enterprise market by institutional investors.Also,it ought to standardize and guide their investment behaviors.Institutional investors should strengthen self-management,and companies in growth enterprise market should reduce barriers for them to participate in corporate governance.