An Empirical Study On The Influence Of Institutional Investor's Shareholding On The Speed Of Capital Structure Adjustment Of Listed Companies

The capital structure represents the proportion of different financing sources of the company,and the appropriate capital structure can promote the company to reduce the financing cost,control the financial risk,and create greater value for the whole company.Academic theory about capital structure has a long development process,However,with the continuous progress of theoretical research,scholars find that the optimal capital structure of a company is constantly changing and influenced by many factors,it is not a fixed value.In order to maximize the overall interests of the company,it is necessary to constantly seek and approach the optimal capital structure of the company according to the changes in the internal and external environment of the company.In this process of adjustment,accelerating the pace of adjustment can reduce the damage to company value,but the speed of adjustment is affected by many factors.At present,the academic circles have studied these influencing factors from many perspectives,such as the characteristics of the company itself,the characteristics of the external environment and so on.Through deeply studying,the researchers found that the adjustment speed will not only be affected by the transaction cost,but also by the agency cost.In order to speed up the adjustment speed,it is necessary to strengthen corporate governance.As the basis of corporate governance,the academic research on the dynamic adjustment of ownership structure is still relatively few,so this thesis starts with the variable of institutional investor shareholding ratio,and studies how to maximize the value of the company by improving the ownership structure of the company and improving the speed of capital structure adjustment.Institutional investors have larger capitals and more professional knowledge than individual investors,and also have broader channels in information access,so their investment trends often become the guidance of the market.More importantly,institutional investors are able to participate in the internal governance of the company by virtue of their financial and information advantages,but it is difficult for individual investors to do that.At present,our country has issued relevant policies to encourage institutional investors to participate in corporate governance,so strengthening the participation of institutional investors is of great significance to improve the ownership structure and realize the optimization of capital structure.Because the main function of the improvement of equity structure is to restrain the principal-agent behavior of management,and then reduce the damage of agency cost to the value of the company,this thesis takes agency cost as the research core,and further discovers that the increase of institutional investor shareholding ratio can reduce the negative effect of agency cost on corporate governance and speed up the adjustment of capital structure,with the method of empirical study.This thesis makes an empirical analysis of the research hypothesis proposed in the third chapter.Firstly,this thesis selects a total of 1245 listed companies in ShangHai and ShenZhen A shares from 2009 to 2018.Then,based on the classical capital structure adjustment model,improved and expanded the model according to the research content.At last,this thesis makes an empirical analysis by using system GMM method and fixed effect regression method.Through empirical analysis,this thesis draws these conclusions:(1)The ratio of institutional investors shareholding is positively correlated with the speed of capital structure adjustment,and the increase of institutional investors' shareholding ratio is helpful to the adjustment speed of capital structure.(2)The relationship between agency cost and the speed of capital structure adjustment is negatively correlated.With the increase of agency cost,the speed of capital structure adjustment will decrease.(3)The increase of the ratio of institutional investors shareholding can reduce the agency cost and reduce the negative effect of agency cost on the speed of capital structure adjustment.(4)Compared to trading institutional investors,the increase of the shareholding ratio of stable institutional investors can not significantly reduce the negative effect of agency costs on the speed of capital structure adjustment.At last,this thesis puts forward policy suggestions on how to improve the speed of capital structure adjustment.It is considered that our country needs to create a good financial environment for institutional investors,reduce the operating and investment costs for them,and gradually liberalize the investment restrictions on institutional investors while carefully preventing the occurrence of financial risks.Institutional investors need to be encouraged to establish the concept of long-term value investment,and actively participate in corporate governance.At the same time,listed companies should take the initiative to strengthen internal control,make the "three sessions" play a good role,and provide good conditions for institutional investors to enter the board of directors and participate in corporate governance.