Network Topology And Fluctuations Transmission Analysis Approach On China QFII Stock Investment Behavior

QFII mechanism was introduced in China in 2002,which has become the second largest institutional investor in the securities market in China.The reasons why QFII was introduced are as follows: 1.to open the capital market gradually as promised in the entry into WTO;2.to exert great influence on related enterprises and introduce excellent corporate governance and management concept from abroad;3.to lead to rational investment behaviors both of individuals and institutions in China with the guidance of value investing and prescribing decisions of QFII so as to establish a more stable and healthy investment environment.With an increasing important role nowadays,QFII will exert a more significant influence on the investment biases and behaviors in the capital market,thus an in-depth study of it will be of great significance in guiding positive investment behaviors and promoting its internationalization.In recent years,new perspectives have been provided with the innovative development of complex networks which can help to better understand how the interaction of the elements in the system influences the bulk property of the complex system on the whole and prove it a proper means to study the characteristics and their influences of the QFII investment biases and behaviors in the capital market.Based on QFII stock holding data,this paper has constructed two QFII stock-holding networks and studied the changes of the stock holding behaviors,the correlation of the stock holding between different QFIIs as well as the fluctuating transmissions between 2004 and 2015 from two aspects,namely,QFII and the shares held.The research has shown that the QFII stock holding network will produce different link patterns at different economic stages,during which QFII mutual stock holding network and QFII stock network are both scale free and possess small world property.QFII mutual stock holding network shows more small-world properties between 2004 and 2011 while showing stronger scale-free properties between 2013 and 2015.The process of dynamic evolution reflects the change of QFII stock holding behaviors.Meanwhile,the correlation of stock holding behaviors will differ with different topological characteristics at different stages of QFII and the stock holding fluctuations will change in the network transmission as well.