The Research Of The Influence Of Institutional Investors On Internal Control Of Listed Companies

In recent years, as the institutional investors developing rapidly, it has become the backbone of the securities market. Institutional investors are the professional and diversification, which promotes the healthy development of China’s securities market.Institutional investors have good risk aversion ability, sound investment style, more investment experience and focusing on value investment philosophy. In the development of our country, comprehensive development and improvement of the institutional investors contribute to the stability of China’s capital market, guide the good investment ideas, and create a favorable investment environment. Institutional investors have a high ability to avoid risks, a professional of investment capacity,more prudent investment style and more investment experience. Comprehensive development and improvement of the institutional investors can help improve the quality of governance and internal control. Our country pay more attention to the company’s internal control and risk management problems and launch a series of policies to encourage the listed company to perfect the internal control system. In order to research of institutional investors on Chinese listed company and securities market, play the role of the institutional investors, improve the level of governance,strengthen the construction of internal control. It is necessary for the institution of listed companies involved in the system and internal control problems do combing,comprehensive analysis and study of these problems. Researching these questions can provide the theoretical basis that developing the country’s institutional investors.This paper reviews the research literatures at home and abroad, and in-depth the principal-agent theory, the cost-benefit theory and stakeholder theory. Using empirical analysis method, from 2010 to 2014 listed on the main board of non-financial firms data as sample, test overall shareholding by institutional investors, and each type of institutional investor shareholding relationship with the quality of internal control.This paper selects internal control index to be explained variables, the institutional investors holding, securities investment fund holdings, the sum of the social security fund ownership, qualified foreign institutional investor shareholding, brokerage,insurance shareholding stake, trust holdings, financial holding company, bank holding as the explained variable, with the company size, asset-liability ratio, main business growth, return on equity, the controlling shareholder stake, ultimately control nature of people, the annual audit firm as control variable. It builds a multiple regression model, researching on the institutional investors holding and the relationship between the internal control of listed companies.Finally, we find that : the greater the proportion of institutional investors holding listed company’s internal control, the higher the quality. In further in categorical study of institutional investors, we find that: securities investment fund ratios and QFII holdings of listed company have positive effect on the quality of internal control;brokers and internal trust of listed companies negative; social security funds,insurance, finance companies and bank holding ratio and internal control of listed companies nothing.