| From the 1990s, the stock market has got rapid development in the twenty years. All kinds of investors have gained expansion gradually, while the leaders of stock market have transferred from the initial individual investors to institutional investors. So far, it has formed many kinds of institutional investors including open-end funds, closed-end funds, insurance corporations and QFII in China’s stock market. The size and quantities of institutional investors have also gained revolutionary expansion in support of our country’s policies. However, with the increasing proportion of institutional investors, the volatility of the stock market hasn’t been decreased and huge market shakes appear at times. Therefore, it has great meanings to survey the influence of institutional investors on market volatility especially emerging markets such as China. Nevertheless, the existing research hasn’t got an agreed conclusion, and there is also a lacking in empirical research about china’s market. Thus, this paper apply the panel statistics regression model to explore the influence of the institutional investors’ shareholding ratio on stock price volatility, based on relevant statistics from ventures of second board market in Shen Zhen. The result shows that the institutional investors’ shareholding ratio has significant inhibition on stock price volatility. While it comes to different kinds of institutional investors, there are significant positive correlations between stock price volatility and its securities investment funds’ ratio, negative correlations between stock price volatility and social insurance funds’ shareholding ratio, but no significant correlations between stock price volatility and security firms, insurance companies’ shareholding ratio. |
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