The Research Of The Influence Of Investors On Corporaiton Performance

Along with the group of institutional investors continue growing and thepromotion of the main situation in market, institutional investors has been becomingthe important subject of investment in the securities market. And with the higher andhigher proportion of stock share, they all have abandoned the past role of passiveinvestors, and began to have a transition into activism. As an important part ofcorporate governance, investment activities belong to one of the decisive factors ofbenefit maximization. Thanks to the participation in corporate governance,institutional investors definitely affect the investment decision, and then affectcorporate performance.Based on others’ study result, firstly this paper verifies institutional investors’influence on corporate performance, and then further research is implemented toexplore its function mechanism. The research of this paper begins with the basicconception of institution investors and non-efficiency investments, and then therelationship of the two is studied respectively from the angle of mechanism analysisand empirical study. In this paper a new method, from the perspective ofnon-efficiency investments to study the relationship between institution investors andcorporate performance, is applied, so as to interpret the mechanism that institutioninvestors can motivate corporate performance. The mechanism is interpreted form theaspects of the motivation of institutional investors and its function mechanism. As tothe empirical study, three models are applied to uncover the mechanism thatinstitutional investors can promote corporate performance by constrainingnon-efficiency investments. And the three models are: non-efficiency estimatingmodel, model of measuring the relevance between institution investors andnon-efficiency investments, and another one measuring the relevance betweencorporate performance and non-efficiency investments. The empirical study of thispaper verify the fact that institution investors can constrain the non-efficiencyinvestments of listed companies and non-efficiency investments do harm to corporateperformance. So we can conclude that institutional investors can help to optimize the performance of public enterprise by constraining non-efficiency investments, whichresults from the heterogeneity of institutional investors. This article gives a series ofrecommendations about how to develop institutional investors in China.