The Impact Of Institutional Investor Research On Corporate Capital Structure

Since the MM theory was put forward,capital structure is a hot issue in financial research.Many scholars have studied the factors affecting the capital structure and have gained a lot.However,there are also some shortcomings.Only from the company's own factors such as profitability,growth ability,company size,management power,etc.,can not effectively explain the practical problems of corporate capital structure.Therefore,some scholars consider the capital structure from external factors,and existing studies have shown that when the company's financial environment is relatively loose and the financing needs are relatively low,information asymmetry is an important factor that influences the decision of the capital structure.However,due to the incompleteness of information search costs and related information disclosure systems,there is widespread information asymmetry between listed company management and investors.Due to the weak position of investors in information,they often make unwise investment behaviors.As an institutional investor with important investment in China's capital market,it has high requirements for the quality of information.There are two main ways for institutional investors to obtain company information.One is passive financial reports issued by listed companies,information disclosed by regulatory agencies,and online media reports.The other is that organizations actively communicate with listed company management.Conduct research to obtain undisclosed information about the company.At the same time,if the research helps to improve the information disclosure degree of the researched company,can it reduce the financing cost by reducing the agency cost generated by the equity financing under the information asymmetry,thus affecting the capital structure of the enterprise?Based on this,this paper takes information asymmetry as the cutting-edge angle,and takes the listed companies that have been investigated by the Shenzhen Stock Exchange from 2014 to 2017 as the research sample,and uses the OLS method to test the relationship between the research institutes and the capital structure of the enterprise,and further examine the regions.The impact of the level of financial development and the nature of the firm on the relationship between the two.The results of the study indicate that institutional site visit is negatively related to the corporate capital structure.That is,the higher the number of institutional surveys,the more organizations the company has been surveyed and the more likely the company is to conduct equity financing,which in turn reduces the long-term debt-to-equity ratio.Further tests found that in areas with low levels of financial development and non-state-owned enterprises,the relationship between institutional site visit and long-term debt-to-equity ratios is even more significant.Moreover,the above conclusions are tested by IV-2SLS and re-measured robustness tests such as explanatory variables.The research results show that institutional investor site visit can reduce information asymmetry and improve the quality of information disclosure.As a result,the uncertainty of the stock's future earnings is reduced,investors take less risk,and the corresponding equity financing costs are reduced,thus changing the company's capital structure.Therefore,this article has prominent practical significance: it not only helps listed companies make appropriate investment and financing decisions,but also helps external investors identify and understand the information disclosed by listed companies,and at the same time,it can further optimize the rules for investigation and disclosure of information by regulatory authorities.Strengthen the supervision of insider trading and provide new ways for CSRC and other securities market regulators to improve the quality of accounting information disclosure to promote the healthy development of China's capital market.