The Effect Of Ownership Concentration On Stock Price Volatility

With the steady growth of the economy,the scale of China's stock market continues to expand.After more than 20 years of development,the total market value of China's stock market has been ranked among the top three in the world.Throughout the trend of stock market in the past decade,we have found that China's stock market fluctuates greatly,and there is a phenomenon that bull market is short and bear market is long.Therefore,stock price fluctuations have become an important reference indicator for investors to measure trading opportunities.At the same time,the equity of listed companies in China has been highly concentrated and gradually dispersed in the process of planning economy turning to market economy.According to information asymmetry,principal-agent and behavioral finance theory,this paper believes that equity concentration can affect the company's stock price fluctuation through the supervision mechanism and the short-selling mechanism,and institutional investors' shareholding in the company's stock also affects stock price fluctuations in terms of shareholding preference,trading behavior and herding effect.This paper collects the data of the CSI 300 Index Company during the period of 2008-2018,and selects the stock price volatility as the dependent variable,the equity concentration and the institutional investor as the independent variables,and introduces the company scale,the company's debt level,and profitability as the control variables.The empirical analysis of the variables shows that equity concentration is negatively correlated with stock price fluctuations,and institutional investors' shareholdings are positively correlated with stock price fluctuations.It shows that in the current capital market,the stability of the company's stock price needs to be achieved through continuous centralization to major shareholders.The scattered shareholding structure tends to bring stock price fluctuations,while institutional investors not only do not stabilize the stock market,but the increase in their shareholding ratio will also aggravate stock market volatility.The reasons may be that the market supervision system is imperfect,the institutional investors' investment mentality is impetuous,and the retail investors follow the institutional buying to produce a herd effect.Finally,according to the research results,this paper puts forward three suggestions: First,listed companies should rationally concentrate their equity and reduce stock price fluctuations;second,the regulatory authorities should improve the supervision system and strengthen the supervision of institutional investors;third,retail investors should cultivate the habit of rational investment and strengthen financial knowledge learning.