Heterogeneous Institutional Investors' Shareholding Preference And Its Effect On Stock Price Volatility

Under the background of advancing the reform of the capital market and preventing and resolving financial risks,institutional investors,now an important part of China's securities market,have been placed by the supervisory authorities on expectations of maintaining market stability and promoting the sound and healthy development of the capital market.However,both China's securities market and domestic institutional investors,despite being promoted by policies,have achieved extraordinary rapid development,but at present they are still in an immature stage.Whether or not institutional investors' preference for shareholdings can play a positive role in stabilizing the market has always been one of the focuses of debate in academic circles.It is of great theoretical and practical significance to have a deeper understanding of institutional investor's stock preference and to correctly understand the impact of institutional investors' stock ownership on stock market volatility.This article theoretically analyzes the relationship among institutional investor heterogeneity,institutional investors' stock holding preference,institutional investor's shareholding and stock price volatility.Based on this,it has a total of 23 issues from the first quarter of 2012 to the third quarter of 2017.The quarterly data is a sample,institutional investors are divided into stable and transactional types,and different market conditions are added to the background.Empirical studies are conducted on the preference of heterogenous institutional investors and their influence on stock price volatility.The research results show that both institutional investors and stable institutional investors prefer liquidity,profitability,and growth of corporate stocks.The stable institutional investors also prefer company stocks with high resource utilization efficiency;Under the market conditions,the proportion of shares held by institutional investors and their degree of change are positively related to the stock market volatility.Both stable and trading institutional investors will increase market volatility;in differentiating market conditions,regardless of rising prices or falling prices,Both stable and transactional institutional investors have also exacerbated market volatility.This may be due to the fact that China's institutional investors are still in the relatively immature stage,and the “chasing and selling” behavior of large institutional investors has exacerbated market volatility.Failure to achieve a stable market.After years of rapid development of institutional investors in China,institutional investors have become an important part of China's securities market participants,and have gradually changed to marketization,specialization,and standardization.Understanding the shareholding preferences of different types of institutional investors under different market conditions and their impact on stock price volatility can help management clearly understand the role of institutional investors and guide all kinds of investors to participate in order through a reasonable supervision mechanism.Securities market transactions,thereby promoting the stable and healthy development of the securities market.