Institutional Investors, Equity Check-and-balance And Controlling Shareholder Tunneling

With the continuous development of corporate governance practices and theories,the research on the agency issues of controlling shareholders is increasingly becoming the focus.Whether it is the mature capital market or the emerging capital market in Western developed countries,there are often controlling shareholders or large shareholders holding large shares in listed companies.The issue of equity institutions in China's capital market has always been an important factor affecting the improvement of corporate governance.In order to effectively solve the problem of “one dominance,” the split share structure reform has been implemented.State-owned shares have continued to reduce their shareholdings,and the size of tradable shares has continued to expand.However,after a series of reforms,the problem of high concentration of ownership has not been achieved.solve.The asymmetry of ownership and control of the controlling shareholder makes the controlling shareholder's lack of effective checks and balances against the interests of the minority shareholder.The tunnel behavior of controlling shareholders is not conducive to the healthy development of listed companies,but also infringes on the investment interests of small and medium shareholders and is not conducive to the development of the capital market.In order to effectively deal with the expropriation behavior of controlling shareholders,it is an important trend for institutional investors to participate in balancing controlling shareholders.Therefore,this article will empirically analyze the influence of institutional investors on the “tunnel” behavior of controlling shareholders from the aspects of equity concentration,equity balance and heterogeneity of institutional investors.The article first defines the concept of institutional investors,controlling shareholders,and tunneling effects,including the motivation of institutional investors to participate in corporate governance,methods of governance,and the impact on corporate performance;the effect of institutional investors on the tunneling effect of controlling shareholders;The effect of the tunneling effect of controlling shareholders is reviewed in three aspects.Secondly,the author analyzes the causes and performance of the controlling shareholder's agency problems,and uses the game theory method to analyze the balance of institutional investor's shareholder's infringement behavior.Finally,an empirical analysis of the 2011-2016 sample data of A-share listed companies in China's Shanghai and Shenzhen Stock Exchanges will be used as a proxy for the "tunnel effect" of controlling shareholders.Regarding the heterogeneity of institutional investors,on the one hand,institutional investors are defined to consider the stability of institutional investors,ie whether they adopt value investment,value the long-term development of the company,actively participate in corporate governance,and invest only in the acquisition of price difference through stock trading.It is stable and transactional.On the other hand,considering whether the independence of institutional investors is closely related to the target company,institutional investors are defined as: independent and non-independent.Using quantile regression to verify the degree of institutional investor's shareholding balance affects the tunneling effect of controlling shareholders.The research results show that the institutional investor's ownership concentration is negatively related to the “tunnel effect” of the controlling shareholder,which indicates that the higher the institutional investor's ownership concentration is,the stronger the restraining ability of the controlling shareholder,and the higher the controlling member's tunneling cost is,The less likely it is to happen.Use value investment strategies to abandon the stability of short-sighted behaviorInstitutional investors can effectively suppress the “tunneling effect” of controlling shareholders.Compared with non-independent institutional investors,independent institutional investors are also more effective in suppressing the “tunnel effect” of controlling shareholders.Finally,based on the conclusions,the corresponding policy recommendations are proposed: strengthening the management of institutional investors,optimizing the investment environment,advocating institutional investors for value investment,and pointing out the deficiencies of this paper.