A Study On The Relationship Among Institutional Investors,Agency Cost And Corporate Performance

The gradual improvement of the capital market has laid the foundation for the emergence of institutional investors.Along with the change of economic environment and policy guidance,institutional investors increasingly become an important strength in securities market,and play a positive role in promoting corporate governance and market stability.As for the influence of institutional investors on the market,especially on corporate performance,scholars at home and abroad have conducted a lot of researches,but there is no unified conclusion at present.Some scholars believe that institutional investors with high shareholding ratio and professional strength will actively participate in corporate governance,supervise management and curb the hollowing of large shareholders,thus improving corporate performance.Other scholars believe that institutional investors who focus on short-term interests tend to vote with their feet,and short-term trading behavior characteristics make them less motivated to participate in performance management activities.Some scholars believe that institutional investors conspire with management to infringe on shareholders' interests.Not only in theoretical circles,but also in the actual performance of institutional investors,institutional investors who pursue shareholder activism and speculative trading coexist in the capital market.Driven by short-term interests,hollowed behavior securities insider trading in the market and intensified,and in May 2017,regulators due to new rules issued by,in order to curb the behavior through regulating the behavior of underweight.However,whether institutional investors are value investment or speculative profit for the company,can regulatory policies play a benign role? These questions remain to be clarified.This paper focuses on the study of the influence of institutional investors on corporate performance.Consider the institutional investors affect corporate governance after taking a stake in the company,therefore,to explore the effectiveness of institutional investors on corporate performance,and to avoid conduction path is too long,this article introduce the agency cost as intermediary variable.Based on the actual background and previous research,the institutional investors are regarded as heterogeneity and classified into stable and transactional types.Using theoretical analysis and empirical research methods,the following conclusions are drawn from the analysis of empirical data of Shanghai and Shenzhen listed companies from 2011 to 2016 :(1)the shareholding of institutional investors is positively correlated with corporate performance;(2)institutional investor holding is negatively correlated with the cost of agency;(3)agency cost plays an intermediary role in the influence of institutional investor shareholding and corporate performance.All of these effects are more significant among stable institutional investors.This paper studies the influence of different types of institutional investors on corporate performance from the perspective of agency cost,which makes up for the deficiency of existing researches and provides ideas for follow-up research.In addition,this paper also provides theoretical suggestions for the development of institutional investors in China,and provides reference for policy formulation and implementation.