Research On The Compound Effect Of QFII And Feedback Behavior Of Domestic Institutional Investors

With the removal of QFII investment quota restrictions,QFII will play an increasingly important role in China’s securities market.There are many differences between QFII and domestic institutional investors in the source of funds,investment experience,and investment philosophy.As a major player in the Chinese securities market,their investment behavior may differ from domestic institutional investors.The value investment philosophy of QFII enables them to make rational investment decisions ahead of domestic institutional investors,who are more inclined to wait for the market trend to stabilize before investing.Both QFII and domestic institutional investors have feedback behavior characteristics,but QFII’s feedback behavior is based on rational expectations,for the purpose of expanding the profit range,and will take negative feedback behavior to arbitrage in a timely manner,while domestic institutional investor feedback behavior has obvious lag,which generally shows the characteristics of positive feedback behavior of trend investment.QFII’s first implementation of feedback behavior and domestic institutional investors’ lagging feedback behavior constitute a composite mechanism of the two feedback behaviors,and on this basis,a composite effect on asset price fluctuations is formed.This study first proposed the composite effect of QFII and domestic institutional investor feedback behavior.In the theoretical part,a detailed analysis was made of the composite mechanism between QFII and domestic institutional investor feedback behavior and its relationship with asset price fluctuations.The theory of investor investment behavior has been expanded.The empirical part has verified the correlation between QFII and the feedback behavior of domestic institutional investors and market volatility,and based on this,put forward feasible suggestions for the regulatory authorities for reference,which has important theoretical and practical significance.In terms of research methods,a combination of theoretical analysis and empirical analysis is used.In the theoretical analysis section,starting from thedifferences between QFII and domestic institutional investors,the motivations for QFII and domestic institutional investors to adopt feedback behaviors are analyzed,and an evolutionary game model is established to analyze the QFII and domestic institutional investors’ adoption in the early stage when asset prices are undervalued.Based on the differences in investment behavior,based on this,a mathematical model is constructed to analyze the composite mechanism of QFII and domestic institutional investor feedback behavior,the change process of feedback behavior,and the composite effect of the combination of the two feedback behaviors on asset prices;in empirical analysis In part,the differences between QFII and domestic institutional investors ’feedback behaviors under different market conditions are tested first,and then a VAR(3)model is constructed to use QFII and institutional investors’ feedback behaviors and turnover ratios by means of impulse response function and variance decomposition.The correlation between market and market volatility has been studied in detail.The main research conclusions are as follows: First,the feedback behavior of QFII is leading,and the feedback behavior of domestic institutional investors is lagging;second,the feedback behavior of QFII and the feedback behavior of domestic institutional investors are in different market conditions.They are respectively asymmetric;third,the impact of QFII feedback behavior on market fluctuations is adaptive,while the feedback behavior of domestic institutional investors will aggravate market fluctuations,and QFII feedback behavior,domestic institutional investor feedback behavior and market fluctuation It forms a closed loop of feedback,and the change in turnover rate is the chain linking this closed loop.