Research On QFII Investment Behavior In China Based On Complex Network Community Division

Entering the 21st century,the pace of China's financial opening up is accelerating gradually.The introduction of qualified foreign institutional investors(QFII)in the securities market is a significant measure of China's financial market reform and opening up,which is of great strategic importance.As mature institutional investors from abroad,what kinds of investment behaviors QFII would take under the low efficiency market environment of our country,and whether they would adopt the value investment idea and promote our market to be more healthy and stable as expected by the management people have always been hot issues concerned by all parties related.Firstly,based on the theory of economics and investment,combined with the development status of securities market of China,this paper analyzes possible investment behaviors of QFII under the low-efficiency market environment in China theoretically.Then through the complex network analysis and econometric analysis,this paper makes an empirical study on the investment behaviors of QFII,and puts forward the relevant countermeasures and suggestions according to the results of the empirical analysis.In order to carry out a more precise research,we first use the modified BB turning point method to divide a bull market and a bear market.According to the partition result,the QFII heavy holding shared stock network of bull market and bear market is constructed respectively.By using the complex network analysis method,we get the geometric characteristics of the network.It is proved that the QFII heavy holding shared stock network of China is a scale-free network,which indicates that there is a phenomenon of "preferred connection" between institutions.Further using the Louvain algorithm of complex network method,we divide the association of QFII heavy holding shared stock network in bull market and bear market respectively,and find that QFII have obvious community behavior when investing in our country.Every community is formed around the important nodes in the complex network,that is,the key institutions of QFII.This proves that the investment behavior of QFII in the securities market of our country has obvious "herding effect",and it is the typical type of "following sheep" imitating the "leader".Therefore,relevant departments of our country should focus on strengthening the supervision of key QFII to maintain market stability.On the basis of community division,this paper uses panel mixed regression to test the behavior of QFII investment preference.It is found that the holding behavior of QFII has a typical tendency of value investment,at the same time,they pay more attention to the corporate governance structure.Therefore,this paper thinks that QFII mechanism is of positive significance in promoting the steady development of China's securities market,improving the overall risk prevention ability of the market,promoting the maturity of the investment concept of market investors,and promoting the improvement of the corporate governance structure.