Will The Relationship Between Fund Managers And Alumni Aggravate The Fluctuation Of Stock Market?

In recent years,China's stock market has been experiencing drastic fluctuations.In order to stabilize the market,the CSRC has been pursuing the basic policy of developing institutional investors beyond the norm in order to stabilize the market with the help of long-term investment and value investment tendency of institutional investors.According to statistics from iFinD financial database of Tonghuashun,by the end of 2016,the proportion of Chinese institutional investors in A-share market has exceeded 60%,which has a decisive impact on the development and stability of the stock market.However,after the introduction of institutional investors,China's capital market remains volatile.Institutional investors often participate in insider trading cases,and their market stabilization function has been controversial.So,does institutional investors play a stabilizing role in the capital market? There are also disputes about this in the domestic and foreign research.In view of the fact that most of the fund managers and executives in our country graduated from well-known universities in China,and there is a certain alumni network between them,the social network data between the executives and fund managers of Listed Companies in our country are constructed by manual sorting and computer literacy,and based on the fund from 2003 to 2016.Based on quarterly data,this paper empirically examines the impact of the relationship between fund managers and alumni of senior managers on the volatility of stock prices.This paper intends to interpret the controversial role of institutional investors in stabilizing the market from the perspective of alumni network.The research finds that private information transactions between fund managers and executives based on alumni relationship will result in higher synchronization of stock prices.And because of the timeliness of information,fast-in and Fast-out liquidation will aggravate stock price volatility.Further analysis finds that the existence of alumni relationship will aggravate the informationasymmetry among investors,and lead to the short-term investment behavior of fund managers,which is manifested in the shorter period of related positions of fund managers,the higher turnover rate,and the crowding out of other unrelated professional investors.Finally,the paper tests the possible endogenous problems,and uses difference-in-difference model and a new measurement scheme for alumni relationship to test the stability of the main regression results.In addition,the study finds that the degree of marketization and state-owned property rights will reduce the impact of alumni relationship of fund managers on corporate stock transactions,that is,the areas with higher degree of marketization and state-owned enterprises can effectively reduce the fluctuation of stock prices caused by alumni relationship.Private information transactions between fund managers and company executives based on alumni relationships are mainly reflected in good news.Therefore,when good news comes to the company,alumni network will bring more violent fluctuations in stock prices.