The Influence Of China's Institutional Investors On Listed Companies' Financing Behavior And Corporate Performance

In the last few years, the institutional investors have developed dramatically, especially in the US and UK markets.They have been active investors to participate in the corporate governance.In this context,along with quickly expanding, institutional investors are not only the nucleus of the development of capital market every country, but also become more and more active in sticking up for their rights and obtaining long-term investment income through participating the governance of listed company.But the effect is limited dues to the problem of China's corporate governance and institutional investors itself. Therefore, researchers have interest on whether institutional investors have any influence on the performance of listed companies in China, provide a number of recommendations for institutional investors involved in governance of listed companies.This paper firstly reviews the researches of predecessors on related subjects, which provide an essential theory basis for the following research, and then introduces the development of institutional investors.What's more, analyzes the rise of institutional shareholder activism and the effect of China's institutional investors on corporate governance, also explore the institutional investors under the financing of listed companies'behavior and performance. After that, this paper examines the relativity of institutional shareholdings and the financing of listed companies' behavior, invest behavior and corporate performance from 2004～2007.According to the results,the share of institutional investors is obvious positive related with earnings per share,but its relation with financing, the scale of investment and rate of return on common stockholders' equity is not strong.The findings show that institutional investors do play a positive role to corporate performance,but we can't exclude the possibility that institutional investors choose those companies who has outstanding achievement to invest.Summarizing the full text,it appears that institutional investors have not actively involved in corporate governance. Finally, on the basis of the empirical research and literature,this paper suggests that institutional investors should be improved to a larger extent to facilitate their involvement in corporate governance.In addition,this article also suggests that encourage institutional investors to take joint action and improve the capital market.