Institutional Investiors' Corporate Site Visits,Internal Control And Investor' Conrfidence

In order to standardize activities that between companies and investor and protect the right that obtain information of investors,Shenzhen Stock Exchange set the rule that all the public companies should disclose information about site visits in annual report since 2009,such as time,place,name,date and so on,site visits has been widespread concerned.Compared with other ways to get information,site visits is easier to obtain private information by observing the actual operating conditions of company or paying attention to the tone and expression of the face-to-face communication.Compared with ordinary investors,Institutional investors have more professional expertise and resources.Moreover,institutional investors can transfer private information to other investors by buying and selling in the capital market.However,because of the information asymmetry between investors and companies in our capital market,there are a lot of behavior that damages the interests of the investor.Then,whether investors can protect their own interests after receiving the private information obtained from the site visits,in the end,investor' confidence are improved?In addition,high quality internal control not only can reduce the degree of information asymmetry,but also can ease the principal-agent problem,so high quality internal control can protect investors and enhance investor' confidence.However,there is no research shows that the high quality internal control can improve investor' confidence.Meanwhile,institutional investors' corporate site visits and internal control play a important role in reducing the degree of information asymmetry.Further,when institutional investors' corporate site visits and internal control simultaneously influence investor' confidence,what kind of the mutual impact of above on investor' confidence will produce?On the basis of the research at home and abroad,this paper applicates the method of literature analysis and review,logical assumptions and empirical test,based on samples of A-share listed firms in Shenzhen main board from 2009 to 2014.It chooses institutional investors' corporate site visits and internal control as a starting point to explore the impact of these on investor' confidence,tests the interaction of institutional investors' corporate site visits and internal control when they affect investor' confidence,and explores whether institutional investors' corporate site visits and internal control to investor' confidence will be different based on the different marketization progress and information transparency plays a mediating role between institutional investors' corporate site visits and investor' confidence.The results show that increasing the number of institutional investors' corporate site visits and the number of institutions involved in site visits will significantly improve investor' confidence;the investor' confidence is higher in firms with high quality internal control than firms with low quality internal control;there is a substitute relationship between institutional investors' corporate site visits and internal control for investor' confidence.In the further analysis,in the region with higher marketization progress,the substitution effect is significantly weakened.In addition,the study also found that information transparency plays a mediating role between institutional investors' corporate site visits and investor' confidence.In the robustness tests,after controlling the self-selection problems,the conclusion of this paper is still established.These conclusions indicate that increasing the number of institutional investors' corporate site visits,the number of institutions involved in site visits and high quality internal control could improve investor' confidence,and there is a substitute relationship between them in improving investor' confidence.Conclusions of this paper can provide a useful reference and support evidence for the investors and the information disclosure.To the decision of investors,the conclusion that institutional investors' corporate site visits and investor' confidence provides investors with a new perspective that how to obtain effective information and reduce cost of getting information.Base on the effective information,investors have a comprehensive understanding for the value of company,and it is also convenient for investors to choose reasonable investment and reduce the risk of investment loss.To the information disclosure,conclusions of this paper are helpful for company to pay more attention to information disclosure and improve the quality of information disclosure.The finding of this paper also provides government with some reference and proof that make policies and regulations of information disclosure.In order to improve our investor protection system,we analysis the problem and put forward suggestions from modern corporate governance and externally search information factors,it is also good for the steady and healthy development of our capital market.