Research On The Impact Of Institutional Investor Heterogeneity On Stock Price Fluctuation

Since the beginning of the 21 st century,China’s regulatory system has put forward objectives and plans to cultivate and develop institutional investors in order to improve the investor structure of the securities market,and since then,the categories of institutional investors have become richer and the areas of investment have been increasing.It is still a matter of reflection as to whether institutional investors can bring to the capital market the objectives as originally envisaged.Since different investors tend to have different investment preferences and the impact of their investments on share prices,it is important to examine the impact of institutional investor heterogeneity on share price volatility.This paper uses a combination of normative and empirical approaches to investigate the impact of institutional investor heterogeneity on share price volatility.Firstly,the theoretical basis of information asymmetry theory,principal-agent theory,herding effect theory and short-sighted behaviour theory is used to analyse the relationship between them;secondly,quarterly data of A-share listed companies from 2016 to 2021 is used as a sample,with share price volatility as the explanatory variable and the shareholding ratio of stress-sensitive institutional investors and the shareholding ratio of stress-resistant institutional investors as the explanatory variables,to empirically investigate the The relationship between institutional investor heterogeneity and share price volatility is investigated empirically.Finally,the mediating roles of equity checks and balances,executive compensation and corporate innovation in the influence of shareholdings of stress-sensitive and stress-resistant institutional investors on share price volatility are analysed.The findings show that:(1)institutional investor heterogeneity has different effects on share price volatility.Among them,stress-sensitive institutional investors have a facilitating effect on share price volatility,while stress-resistant institutional investors have a hindering effect on share price volatility.(2)Enhancing equity checks and balances,increasing senior management compensation and increasing corporate innovation investment are channels that promote the role of stress-resistant institutional investors in mitigating share price volatility.On this basis,this paper puts forward specific recommendations on the role of institutional investors in stabilising the stock market,including that the government should strengthen classification and regulation,promote high-quality development of institutional investors and improve internal corporate governance.