Management Power,Institutional Investors And Corporate Violations

The number and market capitalization of China's listed companies are increasing,and the scale of capital market is expanding constantly.At the same time,irregularities at listed companies are also high.From 2013 to 2017,there are hundreds of listed companies break the rules every year.This behavior not only damages the company's own reputation,but also has a negative impact on the company's sustainable development,and also interferes with the market.This has brought a heavy blow to fair trading in the securities market.In order to establish a stable and healthy market environment,it is necessary to find out the motivation for companies to violate the rules and find effective ways to solve the problem.Most of the existing studies focus on the impact of board members and executive characteristics on corporate irregularities.Few have studied the relationship between executive power and corporate irregularities.As the actual operator of a company,executive decision-making has a vital impact on the operation of the company.Whether the excessive executive power will increase the risk of corporate irregularities is worth exploring.Institutional investors,as an organization capable of external governance of listed companies,are rarely studied in the literature on the relationship between management power and corporate irregularities.In the context of frequently violations,analyzing the internal relationship between managerial power and corporate irregularities and investigating the influence of institutional investors on their relationship can provide some reference for regulators.Firstly,this paper combs the existing literature,combines theoretical analysis and empirical research,uses the data of A-share listed companies from 2013 to 2017 as the research sample,divides corporate irregularities into irregularities probability and degree,analyses the relationship between managerial power and corporate irregularities probability,managerial power and corporate irregularities degree,and further investigate the impact of managerial power on corporate irregularities in state-owned and non-state-owned enterprises.At the same time,institutional investors are included in the scope of the study,examine the impact of institutional investor shareholding ratio on management power and corporate irregularities,and the impact of heterogeneity of institutional investors on management power and corporate irregularities are examined.Empirical tests show that managerial power has a significant positive impact on the probability of corporate irregularities and corporate irregularities,and managerial power has a greater positive impact on corporate irregularities in state-owned enterprises.At the same time,the proportion of institutional investors has a negative regulatory role in the relationship between managerial power and corporate irregularities.Institutional investor stability has no significant negative moderating effect on the relationship between management power and corporate irregularities.According to the empirical conclusions,this paper argues that we should strengthen the supervision of the management of listed companies,increase the investment scale of institutional investors,and advocate the transformation of institutional investors from short-term speculation to long-term investment,so as to play an effective regulatory role of institutional investors and reduce the occurrence of corporate irregularities.