Institutional Ownership And Performance Of Listed Companies

In the half past century, many institutional investors of different countries gradually become an important component of the stock market after the rapid development. Driven by the demonstration effect of western countries, as an emerging market, China has gradually recommended this system, speeded up the cultivation and development of institutional investors. With the development of China’s institutional investors, a range of issues such as defects of the original-split share generating the largest shareholder related transactions, occupation of the listed company’s funds, abusing of funds raised, the poor performance of the company leading to the share price slump increasingly emerged. At the end of2006, the split share structure reform was basically completed. With the changes of this policy, the institutional investors in China had a fundamental improvement in the participation of the governance of listed companies. After the split share reform, China’s institutional investors in the capital markets played an important role and the institutional investors’role in the effectiveness of the listed companies became attractive hot spots of research. In this paper, the institutional investors after the split share structure reform are the goal of research.This paper is divided into six chapters. The structure and main points are listed as follow:Chapter1:This chapter introduced us domestic and foreign institutional investors in the course of development and current status and analyzed the behavior of institutional investors, institutional investors in the development of the capital market and corporate governance. It also included combing the institutional investors holding impact on the performance of the company’s domestic and international literature, analysis of the inadequacies of the existing literature. So it laid a theoretical foundation and literature foundation, which led to the significance and innovation point of this article.Chapter2:This chapter elaborated on the type and course of development of China’s institutional investors. During the two decades of the development of China’s securities market, institutional investors gradually became the backbone of the entire market. The institutional investment community is composed of securities investment funds, social security funds, insurance companies, securities companies, qualified foreign investors (QFII). However, due to the presence of the split share structure, the supervisory role of institutional investors is limited. So we start from the point of view of the analysis of the split share structure reform, the effects of participation in corporate governance and the impact of institutional investors.Chapter3:This chapter gave us the theoretical analysis on the performance of institutional investors and listed companies. It included institutional investors in shareholder activism, principal-agent theory and stakeholder theory.Chapter4:Empirical research. By formulating hypotheses and building models, it tested data on the share reform of listed companies in China. The methods used included descriptive analysis, correlation and regression analysis. Then through the analysis of empirical data, it verified the holdings of institutional investors on corporate performance, and provided data to support the conclusions of this study and policy recommendations.Chapter5:This chapter compared the Financial Street and China World Trade Center as a case. Through examining the institutional investors’stake on the performance of this two companies, it supported the conclusions of this study.Chapter6:This chapter pointed out the great significance for China’s institutional investors because of the split share reform. And it recommended the strong practical significance for institutional investors and securities regulators.Anticipated contribution and inadequate:First, the analysis based on empirical data after the share reform of listed companies in China. This article based on empirical data after the share reform of listed companies in China, and the effect of the relationship between the study of institutional investors’ ownership and listed company performance, and mainly tested the effect of the reform and the role of institutional investors. The conclusion was of great significance for the split share structure reform and development of China’s institutional investors. The scope of the study of the existing literature went a step further. Second, it included innovation on the definition and elaboration of institutional investors. According to the influence of the degree of development of the institutional investors and the capital markets, this paper redefined the composition of China’s institutional investors. On the basis of the previous literature, it widened the scope of the definition of institutional investors. Institutional investors within the meaning of institutional investors stake was not just the Securities Investor Fund previously defined in the literature, and also added the social security fund, insurance company and the QFII. So it further improved the relevant research.Third, take the proportion of top ten shareholders as a variable and study their impact on institutional investors holding. By examining the top ten shareholders, it could distinguish between the dominance phenomenon and the degree of ownership concentration results. So the conclusion was more accurate.Forth, this paper gave some new proposal on the capital market policy after the split share reform.However, this article also inadequacied. First, this paper selected empirical data of both the bull and bear markets, stock prices were influenced by macro impact. So it may result in being inaccurate to judge the performance of the company. The second was this study of institutional investors’shareholdings of listed companies was confined in performance, not had a more comprehensive study of corporate governance. So, I hope that the investigators are able to improve the inadequacies of this article and continue in depth-study of institutional investors.