The Research Of The Institutional Investors Influence On Enterprise Performance Based On Institutional Environment

In the past 30 years, one of the most significant changes in the global capital markets is the rapid rise of the institutional investors, there are a large number of scholars have verified the institutional investors have a very significant impact on the capital market stability, resource allocation, corporate governance and other aspects in developed countries such as Britain and the United State.Although the development of China’s institutional investors is very short, but it is pinned at easing large shareholder tunneling behavior to enhance China’s corporate governance standards and improving the efficiency of capital markets and other aspects. Whether current institutional investors in China’s capital market can serve as an effective external governance mechanism to improve enterprise performance? Whether the behavior of institutional investors will be bound by the external macro-governance environment and what kind of impact that the macro-governance environment will have on institutional investors to play governance effect?In order to answer the above questions, based on System theory,Principal-agent theory and Stakeholder theory, reviews domestic and foreign researches related to institutional investors influence on enterprise performance, and this article from the institutional investors share holding ’ability-will-way’ to analyze its impact on business performance, and doing ways assay on the basis of ensuring the ability and willingness of institutional investors participating in corporate governance, explored the internal mechanism of the effects of its actions in a deeper level and build a institutional ownership transmission mechanism affecting corporate performance, it also pointed out that this transmission mechanism will be affected by the institutional environment. On the basis of theoretic analysis, this article selects 726 listed companies ’panel data for four consecutive years as the research sample and empirically tests the effect of institutional investors on enterprise performance in China, it also divided these companies into companies in a good institutional environment area and companies in poor institutional environment area from the perspective of differences in institutional environment to examine the macro-governance environment on the impact of the governance effect of institutional investors, finally draw the following conclusions:1.Institutional investors can not only through multi-faceted approach such as privately negotiation, soliciting delegate the right to vote and shareholder proposals and with their own advantages in the position, professional, information and operational impact on business performance, but also in consideration of the cost-benefit principle, the institutional investors are willing to participate in corporate governance.2. Institutional investors can effectively improve the company’s governance, and the higher the stake, the stronger its effect on improving business performance. It shows that institutional investors holding proportion is higher, the cost of implementing the ’exit’ strategy will increases correspondingly, which leads to institutional investors more actively involved in the corporate governance, thus more conducive to enhancing enterprise performance.3. Under the different institutional environments, institutional investors at different levels on the improvement of the enterprise performance. Governance role of institutional investors are restricted under the poor external macro-governance environment situation, so that the degree of impact of increasing the shareholding proportion of institutional investors on company operating performance and the value of company is significantly lower than the company in good institutional environment areas.