Research On Behavior Patterns Of Institutional Investors Participating In Corporate Governance Of Public Listed Companies

Institutional investors are financial institutions making investments. Concerned with interest of themselves, they pay great attention on corporate governance of public listed companies. Meanwhile, they also have abilities to participate in corporate governance. And the behavior pattern of governing corporation is the key to exert these abilities.There are a few successful cases that institutional investors directly take part in the corporate governance in western countries represented by the United States, where grown stock markets have been established. Moreover, this pattern is supported by many academicians. But in despite of some advantage, such pattern has solid objection. Based on that, this thesis brings forward a new pattern that institutional investors improve the whole level of corporate governance by choosing winners (companies of good results), so then they can achieve as well as public listed companies. Compared with the pattern of direct intervention, choosing winners has advantages in many aspects. In the point of costs to earnings, the latter pattern is more"cheap".After discussing the advantage and disadvantage of the pattern that institutional investors directly participate in corporate governance, the thesis points out major institutional investors lack the drive to do so, except for pensions. Furthermore, even if being active, pensions have to face difficulties beyond their capabilities. Then based on introducing the flow of choosing winners, the thesis analyses conditions through which it could attain purposes. Considered with American practice, it is clear that this pattern is feasible. Further researches have indicated that choosing winners precedes direct intervention not only on the effects of improving corporate governance but also harmonizing relationships with managers.Finally, the thesis discusses reasons why institutional investors should upgrade corporate governance of public listed companies through choosing winners in China and provides some suggestion on the performance.