The Influence Of Institutional Investors On The Volatility Of Stock Prices

Institutional investor is an important participant in the capital market.It has a great influence on capital market by virtue of capital advantage,information advantage and technical advantage.As early as in the 1970 s,under the guidance of effective market theory,the mature capital market in Europe and the United States vigorously developed institutional investors,to utilized its influence on capital market and stabilize the irrational fluctuation of stock price.China's capital market started late,and officially started in 1990.To catch with the high-speed economic growth demand,development of china's institutional investor used just 27 years to complete the mature stock market's hundreds years' development.but the extensive development often lead to stock price abnormal fluctuations,in order to stabilize the stock market fluctuation in Chinese stock market and have a good influence on China's real economy,China can learn from the methods of foreign institutional investors,and carry out the "extraordinary development of institutional investors" strategy in 2001.Under the development strategy of institutional investors,institutional investors in China have undergone tremendous changes both in their internal structure and external institutional environment,while stock price volatility has always existed.The study found through the literature and empirical research at home and abroad is that the influence of institutional investors on the stock price volatility is uncertain.There are two mainly exists in foreign research and domestic research,while the situation is more complicated in China,in addition to the two kinds of circumstances above,there are different effects according to the different situation in the stock market cycle.There is no final conclusion on how institutional investors impact on stock price.So it is necessary to study the current development of China's institutional investors,and how institutional investors affect the stock price volatility in the future,and how institutional investors should be adjusted in direction of development,to stabilize the price to better serve the real economy.There are five chapters in this paper.The first chapter is the introduction,which mainly introduces the background,significance and purpose of this topic.Then it introduces the research status at home and abroad.Finally,through the literature review,we find out the aspects that need to be improved and the direction of this study.The second chapter is the theoretical basis.First,we define the concept of institutional investors,then according to the common characteristics and personality characteristics,divide the institutional investors in a classified way.and finally introduce the mechanism of institutional investors' role in stock price volatility.The third chapter is the analysis of the current situation of the development and the status of China's institutional investors from two aspects of internal structure and external environment,and then introduces the characteristics of China's stock market volatility and the uncertainty analysis of the development of institutional investors and stock price volatility.The fourth chapter is empirical research.First,we introduce sample selection and index system construction.Then we choose the fixed effect model to study the relationship between institutional investors' shareholding and stock price volatility,and finally get the empirical results.The last chapter puts forward suggestions based on the empirical results,mainly from the two aspects of internal structure and institutional environment,and puts forward suggestions for institutional investors' development so as to improve the abnormal situation of stock price fluctuation in China.Overall,the development of institutional investors in China have achieved certain optimization both in the internal structure and external environment,in order to realize the stability of stock price fluctuation effect,there are still some problems that institutional investors can be improved from the two aspects,...