Institutional Investors,Investor Confidence And Stock Returns

Based on the theory of behavioral finance theory,noise trading theory and investor sentiment theory,this paper takes the intermediary effect test method as the framework to carry on the empirical research to explore whether institutional investors are through the impact of investor confidence,thus affect the stock returns.This paper argues that the entry of institutional investors can effectively enhance investor confidence and increase stock returns.But this view is based on the premise that institutional investors have a significant impact on investor confidence,and investor confidence has a significant impact on stock,returns.To this end,this paper chooses the mediating effect model to study the impact of institutional investors on investor confidence and stock returns,and the impact of investor confidence on stock returns.After these two basic conditions are satisfied,The model examines whether institutional investors ultimately affect stock returns by effectively influencing investor confidence.Furthermore,this paper divides institutional investors into four main types of securities investment funds,brokerage financial products,insurance companies and social security funds to study whether the institutional investors will influence the stock returns by influencing investor confidence will vary depending on the type of institutional investment.To this end,the article defines the proportion of institutional investors holding more than 5%of the shares for the institutional unit,use principal component analysis to build investor confidence index,use ordinary rate of return on the measurement of stock returns,using intermediary effect test model study the effect of institutional investors on investor confidence,the effect of investor confidence on stock returns,and the combined impact of institutional investors and investor confidence on stock returns.The empirical results show that:（1）Institutional investors are positively correlated with investor confidence.Investor confidence is also positively correlated with stock returns,indicating that institutional investors 'professional investment behavior can convey a positive signal to the market and improve investors' confidence to promote stock prices;（2）After satisfying the first two basic conditions,this paper chooses the mediating effect model to verify that institutional investors do improve the stock returns by effectively raising investor confidence;₃Further classifing institutional investors,found that institutional investors through investor confidence affect the stock returns of this mechanism will be different if types of institutional investors vary.Specifically,securities investment funds,brokerage financial products,social security increase proportion of share holdings can effectively enhance the confidence of investors to enhance the stock returns,but insurer holdings can not enhance investor confidence to enhance the stock returns.Finally,according to the conclusion of study,this paper puts forward relevant policy suggestions in three aspects:the development of institutional investors,the improvement of institutional investors 'structure and how to improve and stabilize investors' confidence.