An Empirical Research On The Impact Of Institutional Investors' Holding On Stock Price Volatility

In a country,the stock market is one of the main channels for direct financing,and it is also an effective way to allocate economic resources.China's stock market has developed rapidly since its establishment and has made new tremendous contributions to economic growth.In the years when,the stock market has flourished,China's institutional investors have begun to step into the stage of the stock market step by step,becoming a new force in stock market investment.However,compared with developed countries in Europe and America,relative high volatility exists in China's stock market.Based on this,the research on the investment behavior of institutional investors.including the impact of trading strategies,shareholding ratios and shareholding changes on stock price volatility,is beneficial for institutional investors not only to form a rational investment concept of long-term value investment,but also to adjust themselves behavior.The model is also conducive to the government to strengthen supervision more effectively,and promote the healthy and stable development of China's stock market.The article systematically sorts out relevant Chinese and foreign literatures,and explains the factors influencing the stock price fluctuations of institutional investors from the positive and negative perspectives.This article uses a combination of situation analysis,theoretical analysis and empirical analysis.It explains the impact of institutional investor behavior on stock price volatility with principal-agent theory,behavioral finance theory,as well as stock supply and demand theory.Review the development of China's stock market and institutional investors,and list the problems exposed by China's stock market and institutional investors in the development process.After this we study the influence of institutional investors' shareholding on price volatility of 359 Shanghai and Shenzhen A-shares.from 2013 to 2018,through OLS hybrid regression,cross-section regression and panel regression model.The research results show that in China the institutional investors,represented by securities investment funds,increase the volatility of the stock market with irrational positive feedback trading strategies.The higher the proportion of institutional shareholdings,the stronger the stock price fluctuant will be.The more institutional investors buy the stock in previous period,the greater the fluctuation of the current stock price will be.Base on this,this paper proposes the following recommendations:Continue to vigorously develop institutional investors,guide them to deepen the concept of value investment.Optimize the internal structure of institutional investors,promote the diversified development of institutional investors.Promote financial product innovation,diversify or hedge investment risks through multiple channels.Build a comprehensive and complete financial market,and provide institutional investors with more optional listed companies.Strengthen the construction of relevant legal systems and rationally regulate the investment behavior of institutional investors.