Institutional Investors' Increase In Holding,Internal Control Quality And Earnings Sustainability

Sustainability is one of the important indicators to measure the earnings quality of listed companies,which promotes the realization of the corporate value of listed companies,and is also an important basis for investors to make investment decisions.Because of its importance,earnings sustainability has been widely concerned by many scholars in theoretical research or practical application.In China's capital market,low earnings sustainability is a common problem for many enterprises,which not only hinders the stable development of enterprises,but also is not conducive to the allocation of resources in the whole society,resulting in serious waste of resources.At present,institutional investors are developing rapidly under the policy incentive of our country,and their types tend to be diversified,becoming an indispensable important investor in the capital market.Compared with ordinary investors,institutional investors have more extensive information channels,relying on their resource advantages,professional management team and investment experience to play an active role in supervision and governance of enterprises.In this context,this paper studies whether institutional investors' increase in the shares of listed companies can promote the earnings sustainability of listed companies,and analyzes whether the quality of internal control plays an intermediary role in this process.On the one hand,this paper discusses the strategies to improve earnings sustainability,on the other hand,it enriches the research on the governance role of institutional investors.This paper takes 2009-2018 A-share listed companies in Shanghai and Shenzhen stock markets as the research sample,and uses the method of fixed effect of balanced panel data to empirically test the relationship between the overall institutional investors and different types of institutional investors' increasing shares and the company's earnings sustainability,as well as the intermediary role of internal control quality,taking intoaccount the endogenous problems,using lag variables to alleviate,Finally,the difference between state-owned enterprises and non-state-owned enterprises is further studied.According to whether institutional investors have business relationship with listed companies,this paper classifies institutional investors into pressure resistant institutional investors and pressure sensitive institutional investors.The results show that:(1)institutional investors' increasing holding has a significant effect on the earnings persistence of listed companies,and the quality of internal control plays an intermediary role;(2)after classifying the types of institutional investors,it will be issued At present,only the increase of pressure resistant institutional investors has significantly improved the earnings sustainability of listed companies,and the quality of internal control has played a part of the intermediary effect,However,the pressure sensitive institutional investors have no significant impact on the earnings sustainability of listed companies;(3)institutional investors are more able to play a governance role in non-state-owned enterprises,improve the quality of internal control and earnings sustainability,but not in state-owned enterprises.The conclusion of this paper provides a useful perspective for institutional investors to make a scientific and reasonable development strategy,how to improve the quality of internal control of listed companies,and how to improve the sustainability of corporate earnings.The innovation of this paper lies in(1)to investigate the influence of institutional investors on the earnings sustainability of listed companies by dynamic effect,to study the behavior of increasing their holdings during the year instead of simply analyzing the shareholding situation,and to divide them into pressure resistant institutional investors and pressure sensitive institutional investors,to explore the mechanism and effectiveness of different types of institutional investors,(2)to explore When institutional investors increase their holdings on earnings sustainability,this paper studies the mechanism of institutional investors increase their holdings on earnings sustainability with internal control quality as the intermediary variable,and explores the intermediary role of internalcontrol quality in the influence of institutional investors increase their holdings on earnings sustainability.