An Empirical Research On The Information Mining Capability Of Institutional Investors In China

Compared with individual investors,institutional investors have a wide range of information acquisition channels and professional research and analysis capabilities.Their investment behaviors are more professional and rational.They are value investors in the market and have an information advantage.In order to promote market information efficiency,optimize market structure,and improve market stability,the regulatory authorities advocate “vigorously developing institutional investors”.As early as 2012,Guo Shuqing,then chairman of the China Securities Regulatory Commission,placed special emphasis on guiding and encouraging institutional investors,vigorously supporting the fund industry's innovative development,and encouraging fund companies and other important institutional investors to take a diversified path.However,in recent years,there have been speculations and hype behaviors among institutional investors such as securities investment funds frequently in the immature capital market of China,which caused people's doubts about the professional abilities of institutional investors.The purpose of this paper is to analyze the information acquisition and mining capabilities behind institutional investors' investment behaviors and investment decisions,so as to gain a deeper understanding of institutional investors' investment behaviors and its role in the capital market.Most of the existing literatures research on institutional investors only pays attention to the investment behavior itself and the market impacts caused by it,they ignore the logic process behind the investment decision and the basis for supporting its decision.Few documents analyze the professional investment abilities of institutional investors by exploring the information acquisition and mining system behind their investment behaviors.Based on this,firstly,this paper defines the information mining capabilities.Secondly,from the perspective of information classification,the company's stock trait information can be divided into company trait information,company fundamentals information and company fundamentals private information.Then,this paper selects 1,283 A-shares in 46 quarters from the second quarter of 2007 to the third quarter of 2018 as a research sample,and uses the dynamic panel data model and the group test method to analyze the investment behaviors of institutional investors based on different levels of information to examine the abilities of institutional investors to mine different levels of information.Finally,this paper draws conclusions and proposes policy recommendations.The main conclusions of this paper are as follows: First,institutional investors can tap into the company's trait information,and insist on rational investment in their investment process,rather than being out of the company's performance support and relying solely on the rising or falling stock prices to make trend investment.Second,institutional investors have strong abilities to mine company fundamentals information of large-cap companies,and can invest in value based on future accounting earnings.However,for small-cap companies,they are more speculative in pursuing market hotspots and information noise.Third,at this stage,the institutional investors in China do not have all the information advantages,and can only find stocks with reduced returns through information mining to avoid losses.The results of this paper will help us to understand the information mining capabilities of the institutional investors more comprehensively and intuitively,so as to have a clearer understanding of their market nature and professional capabilities.This article provides a reference for the regulatory authorities to issue targeted policies to guide institutional investors to continuously strengthen their business capabilities,adhere to rational investment,and maintain stock market stability.