The Correlative Research Between Institutional Investment And Corporate Value Added

In the development of the capital markets, Institutional investors are playing an increasingly more important role, it has changed from negative investors to positive investors. Institutional investors are not only the important factors of the development of securities market, but also the core force of the corporate governance.The purpose of this paper is to discuss the necessity and importance of the institutional investors in corporate governance, and do an empirical research on the relationship between the institutional investors and the value created by a corporation. Through the inspection of the relationship between institution investors and the value created by a corporation, discuss whether Chinese institutional investors can have influence on the value of corporations. Mainly explore whether the participation of institutional investors in corporate governance could bring the corporations more value, namely "value added".This paper aims to do empirical research to this problem more comprehensively, revealing the deepest relationship of institution investors and the value added of corporations. This article discusses the relationship between the institution investors and the value added of corporations. Introduces the theory foundation of institutional investors influencing the corporate governance, analyzed the motivation of institutional investors participating in corporate governance drivers, and summarizes the mechanism of institutional investors participating in corporate governance and the effects they have on company's performance. Through empirical analysis, this paper thought that the corporations which have institutional investors can create more value than the company does not have institutional investors. Corporations have larger proportion of investment from institutional investors and corporations whose institutional investors have more power to balance the first largest shareholder both can enhance the value of company. This comes to the conclusion: institutional investors have the ability to create value for corporations. Finally, based on the empirical conclusion, it's recommended that China should continue to vigorously develop institutional investors and should strengthen supervision and construct legal system, in this way, institutional investors can enhance corporate value.