Study On The Influence Of Institutional Investors On Market Stability In China

Since the 1990 s,China's institutional investors have developed rapidly,and at present,its shareholding market value has exceeded that of natural person investors,and has become the main force of the capital market.Institutional investors are often considered to have more professional knowledge of finance and more rational investment behavior.They are the object of our country's constant support with new policies to ensure the stability of capital market.However,with the increasing proportion of institutional investors in China's investor structure,the volatility of China's capital market has not been significantly reduced,and the unreasonable phenomenon of huge market fluctuations still appears in 2015.The research of this paper is carried out from the theoretical level,and it is believed that the influence of institutional investors on market stability has multiple transmission mechanisms in theory,and different types of institutional investors play different roles.The key factor is which mechanism played a major role in the market environment at that time.Through the analysis of the historical data of institutional investors,it is found that in the past 20 years,the structure of institutional investors in our country has undergone earth-shaking changes,from "single public fund" to " stable development of public funds,rapid expansion of insurance and land stock exchange,the gradual formation of a three-foot pattern,other institutional investors diversified development".Due to the change of market environment and structure,this paper divides the panel data of 2000 A-Stock listed companies in 2004-2019 into three stages.Empirical results show that the role of public offering funds has changed from promoting market stability to increasing market volatility;insurance funds have always been the stabilizer of China's capital market because of their steady investment style;the trading concept of "value investment" represented by Lugutong has a positive effect on market stability,while the replacement of Lugutong to QFII has gradually lost QFII's positive effect on market stability;the other types of institutional investors have no significant effect on market volatility.In different historical periods,due to the change of market environment and investor structure,the role of institutional investors in market stability in China has gradually differentiated,but in general,institutional investors have promoted the long-term stability of China's capital market.