The Effect Of Fund Holding On The Corporate Governance

With the gradual development of China’s capital market,institutional investors’ behavior in securities investment has become more and more active.The types of institutional investors and the purpose of investment also show differences.Scholars have also begun to pay attention to the influence of different types of institutional investors on the optimization of the governance structure of listed companies.For a long time,passive funds have been regarded as “lazy investors”.Their participation in securities investment is mainly to track the performance of index to obtain a more stable return.Its negative investment behavior makes investors think that such funds funds have no obvious motivation for participating in the governance of listed companies.However,the goal of the active fund is that the fund manager seeks a super-benchmark performance return,and its proactive investment philosophy is in line with the logic of participating in the governance of listed companies.Some scholars begun to discover that passive funds are characterized by long-term value institutional investors.In terms of professional competence and motivation,there is also the possibility of improving the governance level of listed companies and obtaining long-term returns.Compared with the mature capital markets such as the United States,the Chinese capital market started late and there are still many imperfections in the system.The fund industry has the pressure of performance ranking and the redemption of fund investors.Under such circumstances,China’s securities investment fund managers are more inclined to invest in short-term investment to obtain return on investment.This investment concept makes some active participation.The motivation for the governance of listed companies is insufficient.This paper attempts to study the differences in the impact of the two types of funds,active funds and passive funds,on the governance structure of listed companies within their portfolios.This paper selects the shareholdings of listed funds in the first half of the Chinese market from 2007 to 2016,and uses the index funds to divide the active and passive funds using the CSI 300 constituents and the ratio of the fund holdings of the lagged period as the instrumental variable.The fixed effect regression of the panel is used to study the difference in the impact of the information disclosure quality of the different fund types and the listed companies.And use the two indicators of the fund shareholding ratio change and earnings management to explore the path difference between the active and passive funds affecting listed companies.Through the regression results,this paper argues that the active fund holdings in the Chinese market have no obvious influence on the governance structure of listed companies,but may cause the “herd behavior” of investors in the market because of the frequent adjustment of the trading behavior of the portfolio.To a certain extent,it has increased the degree of information asymmetry in the market.Passive fund holdings have a significant improvement on the quality of information disclosure of listed companies.Passive fund holdings may convey value investment information to investors through their shareholding behavior,reduce the degree of information asymmetry in the market and improve the information disclosure behavior of listed companies.The above research results help investors understand the relationship between the heterogeneity of fund investors in China’s market and the impact of corporate governance outcomes,and proposes to increase the investment status of value investors,reduce restrictions on policies,and help the fund to participate more effectively.The governance of listed companies provides a reference for improving the transparency of market information and cultivating the professional capabilities of investors.