Research On The Impact Of Institutional Investor Holding On The Cost Of IT Listed Companies' Equity Capital

since 2006,China's institutional investors have entered a period of rapid growth.With the increasing number of institutional investors,the continuous expansion of scale and the continuous improvement of collective quality.Scholars have studied the role of corporate governance in a more in-depth understanding.Institutional investors are independent of the internal controlling shareholders and external minority shareholders between the third party strength.Compared with external individual investors,Institutional investors have inherent advantages in capital,information and professionalism.Institutional investors can play a more active role in supervising and improving corporate governance as a trade-off between institutional investors and individual investors.An important indicator of financial performance,the company's cost of equity capital is the potential investors demand returns,it will be affected by the enterprise risk.And improve the corporate governance mechanism helps to reduce the risk of enterprises,and to improve the enterprise's cost of equity capital has a positive effect.The cost of equity capital not only take into account the company itself operating conditions,combined with other factors,can be used as a measure of good.At present,the research to measure the effectiveness of institutional investors governance mechanism to the cost of equity capital in China is still relatively small,and the results obtained are also not the same,visible in the rapid development of institutional investors with Therefore,it is necessary to increase such research and analyze the causes of the differences.This paper combines theoretical analysis with empirical research,based on the definition of relevant concepts and related literature at home and abroad,based on principal-agent theory,stakeholder theory.The cost-benefit theory analyzes the influence of institutional investors' shareholding on the cost of enterprise equity capital,and puts forward four hypotheses of this paper.Then 312 A-share IT listed companies in China are selected as the research samples.Using its annual data from 2012-2016,this paper empirically tests the effect of institutional investor holding on the cost of equity capital in the following year by four multiple linear regression models.It is found that the higher the proportion of institutional investors is,the lower the cost of equity capital is,and the higher the proportion of shares of pressure-sensitive institutional investors is,the higher the cost of equity capital is.The higher the proportion of pressure-resistance institutional investorsis,the lower the cost of equity capital is;the longer the holding time of institutional investors is,the higher the cost of equity capital is.Finally,according to the conclusions of this study,this paper puts forward some suggestions and countermeasures for developing institutional investors and improving the governance of IT listed companies in China.Institutional investors and IT enterprises in China can play an active role in the whole national economy.