Research On The Influence Of Alumni Network Of Fund Manager And Corporate Management On The Fluctuation Of Stock Price

Since 2000,China has developed institutional investors vigorously,hoping that institutional investors can lead the Chinese financial market towards a better situation.However,China’s stock market has been showing a continuous trend of volatility.To the rapid development of institutional investors and the continuous fluctuation of Chinese stock market,many scholars have made researches on the relationship between them,but their conclusions are inconsistent.Under the background of fluctuation of stock price in China,there are frequent reports on insider trading of institutional investors.As information transparency of China’s capital market is not high,the transaction involves lots of private information.While the relationship,as a kind of cost-effective way,can obtain many insider information for institutional investors.In the context of China’s special social and cultural background,this paper studies the relationship between institutional investors and stock price fluctuation from the angle of alumni network relationship.This paper selects Zheshang Juchao Industrial Growth Mixed Securities Investment Fund and the companies it invests as a case study object.This fund had significant performance change after the change of fund managers.This paper obtains school and work background of fund managers and managing group of the listed companies by manual data collection.If the one fund manager and one company manager have a common background,the fund is considered to be connected with the listed company.For a large number of data of invested companies,this paper divides the relations into intimate relations,general relations and no relationship.This paper establishes a simple multivariate regression model and peel off the effects of other factors as much as possible to study the impact of stock price volatility and in-depth analysis of its operation which may influence on the stock price fluctuations.Through research and analysis,this paper finds that when institutional investors have alumni network with the managing group of the listed companies and hold the listed company it will aggravate the fluctuation of the listed company’s price.Institutional investors can obtain insider information by virtue of their extensive alumni network resources that ordinary investors do not know.They can use this information to gain income,and in return,institutional investors will help the managing group of listed companies to gain more profits through their own financial advantages.But the above gains are realized in the case of undermining the interests of ordinary investors.The network of alumni relations may only provide institutional investors with short-term gains or make additional gains for the individuals involved in the transaction,and is detrimental to the overall long-term development of institutional investors.Through the above findings,this paper suggests that the information management mechanism,internal control mechanism and information disclosure system should be strengthened in order to reduce the possibility of information leakage which makes the stock price fluctuate.For institutional investors,we should limit the short-term operation behavior of institutional investors and strengthen the supervision on the disclosure of institutional investors’ investments.And the institutional investors should improve their internal performance compensation system.