Institutional Ownership,management Power And Corporate Performance

As an intuitive representation of business performance,corporate performance is generally used to represent the company's operating results during a period of business.Therefore,it occupies a crucial position in corporate governance and has always been concerned by stakeholders.Under the modern company system,the ownership and management rights of enterprises are separated.In theory,the board needs to maintain actual control over the company's decision making.In fact,due to the information asymmetry,"free riding"."insider control" and other problems emerge one after another,making the controlling power unconsciously transfer to management.In addition,the guidance of the policy of decentralization and decentralization under the deepening reform of the country,the full play of the self-regulating role of the market,the ambiguity of the power boundary of the management as well as the imperfections and imperfections of the internal and external governance systems of the company have made management more decision-making and control space,which provide the possibility to cross the normal power boundary and even make management develop into the actual controller of the company.Besides,based on the assumptions of rational "economic man",the management as an agent,out of the pursuit of maximizing private benefits,is likely to seek rent by virtue of its information advantages and decision-making power in the process of enterprise operation and management,which is specific in self-determined salary,non-pecuniary compensation and a series of non-efficiency investments.the management makes use of power to seek personal gains,while indirectly harming the real interests of the company's shareholders,which makes the agency problem more serious.With the implementation of the policy of "unconventional development of institutional investors".In recent years,institutional investors have been making a huge market influence in the external market.It is increasingly playing the role of "active investor" in the capital market.By virtue of its own industry advantages and information interpretation capabilities,institutional investors not only deliver higher quality information to stakeholders,but also realize effective supervision of the management and play their governance participation function on behalf of shareholders' interests.Therefore,making full use of the positive role of institutional investors may change the current situation.Based on this,this paper takes the improvement of corporate performance as the basic foothold,and selects the data of all A-share listed companies from 2010 to 2017 as the initial research sample.By combining theoretical analysis with empirical research,this paper firstly examines the relationship between management power and corporate performance.Then it examines whether institutional ownership can play a positive role in corporate performance.Finally,the correlation between management power and corporate performance is tested by adding different proportions of institutional investors' shares,so as to check whether it has significant adjustment effect on the relationship between them.The results show that:(1)The expansion of management power will significantly weaken the performance of the comp-any;(2)the participation of institutional ownership helps to achieve corporate performance;(3)institutional investors significantly weaken the negative effect of management power on corporate performance when the shareholding share of the company is high,while there is no obvious regulating relationship when the shareholding share of institutional investors is low.The research conclusion of this paper enriches the research literature on the economic consequences of management power to a certain extent,and expands the new perspective of corporate governance from the perspective of institutional investors.In addition,it further points out the importance of rational allocation of management power to the eomPany's development and the need to strengthen institutional investors in corporate governance,which also provides inspiration and advice for companies to improve their business performance.