Institutional Investors?information Asymmetry And Equity Capital Cost

The most important role of Capital market is distributing the limited resources reasonably and efficiently,and whether the information can delivery efficiently is an important assurance to Capital market working effectively.Information transparency plays a very important role in making investment decisions for investors.Institutional investors with its advantages in capital and profession play a more and more important role.There are many research in the economic consequences of Institutional investors,but the most two points are the influence to equity capital cost and information asymmetry.From the current research results,institutional investors play a "market stabilizer" role,but also play a"market mixer" role.The main point of this paper is to study the relationship between information asymmetry and equity capital cost,at the same time,bring institutional investors into the regression model as moderator to research whether institutional investors would influence the relationship between information asymmetry and equity capital cost.Based on the data which has deal with from 2010 to 2013 listed company in main board,the paper use OLS model test the relationship between institutional investors,information asymmetry and equity capital cost.The results show there is a significantly positive correlation between information asymmetry and equity capital cost;institutional investors weakens the relationship between information asymmetry and equity capital cost.The paper classify the institutional investors to parts by whether the institutional investors have business relation with the invested company,the results show institutional investors have the heterogenicity in this classification.Compared to business-unrelated institutional investors,business-related institutional investors can't weaken the relationship between information asymmetry and equity capital cost.Besides,the paper has found that there is a positive correlation between BETA and equity capital cost,but the data isn't significant.the result shows the capital market in our country isn't content with CAMP model.