The Relevant Research On Institutional Investor And Earnings Quality Of List Companies

In1998,"Fund Kaiyuan" and "Fund Jintai" were listed respectively in Shenzhen Stock Exchange and Shanghai Stock Exchange, which means the first Chinese institutional investors in the true sense of the terms start to act. As the Chinese capital market increasingly expands, institutional investors have gradually become a playing a decisive role group in China capital market, due to their scale advantages, information advantages and profession advantages. The orderly development of capital marker depends on the true and fair accounting information provided by the public companies. The accounting earnings is a part of the important accounting information which the public companies publish in the capital market. Hence, the earnings quality of the public company is significant for the healthy development of China Capital Market. Whether, as the third party between the controlling shareholders and individual shareholders, the institutional investors, really participate in the management of the firm, monitor the management, promote the perfection of governance structure of the public firm and then improve the earnings quality of the public firm is the focus of theorists, the investment community, public companies and government regulators have been particularly concerned. Therefore, the study of this article has some practical and theoretical significance.Aiming at the correlation between institutional investors and the earnings quality of list companies, this article will reach the relevant conclusions by using standard analysis and empirical analysis. The research content of this article covers five aspects, including the introduction, the related concepts and the theoretical basis, construction of the institutional investors and earnings quality correlation model, empirical analysis and conclusions. In theoretical analysis part, this article defines the study scope of institutional investor through summarizing the development of institutional investor in recent years and in this thesis. Then, the paper constructs the theoretical foundation of this article by the principal-agent theory, asymmetric information theory and corporate governance structure theory. In the model construction part, Firstly,this article chooses three variables of institutional investor as the research object by showing the influence factors of institutional investor and earnings quality.Secondly,the subject chooses pharmaceutical company as the research scope by understanding its development in recent years and its future prospects.Thirdly,analysis model can be built for research the assumption. In the aspect of empirical research, this paper uses2008to2012financial data of A-share pharmaceutical company in China and related data of institutional investor ownership to conduct descriptive statistic, correlation analysis and regression analysis. Finally, some conclusions of this article are drawn as follows:the shareholding of institutional investors enhances the quality of listed companies’ earnings; earnings quality improves, as the number of institutional investors in listing corporation increases; When the institutional investors increased holdings,the influence on earnings quality is not obvious. According to the research conclusion, this thesis offers some advices respectively from the perspective of policy, inter agency cooperation and institutional investors organization which can enhance institutional investors participate in corporate governance and improve the quality of listed companies earnings.Then put forward some improvement ideas for the future direction of the research.