Study On The Influence Of Foreign Shareholding Ratio On The Stock Price Fluctuation Of Listed Companies

The implementation of the Shanghai-Hong Kong Stock Connect mechanism in 2014 broke the pattern of two-way closure of the domestic capital market and was an important measure in the development history of China’s securities market.Subsequently,the Shenzhen-Hong Kong Stock Connect was officially launched in 2016,providing more channels for foreign capital to enter the A-share market.It can be said that the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism has a driving effect on capital market innovation,and is of great significance to the development of China’s stock market and the internationalization of the capital market.Since 2017,the international status of China’s capital market has been increasing day by day.Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect,as key parts of the country’s financial opening strategy,have attracted widespread attention from overseas funds.After the A-shares were included in the MSCI index,a large amount of overseas funds flowed into the Chinese stock market,and foreign institutions represented by northbound funds also became the main driving force for the development of the stock market.However,there are few academic studies on the impact of foreign shareholding ratio on the stock price fluctuation of listed companies.Therefore,from this perspective,combined with sample data,research and analysis of the impact of foreign shareholding on stock price fluctuations can provide the academic community with theory and practice.Experience.Based on this,the paper focuses on the impact of foreign shareholding ratio on the stock price volatility of listed companies.Firstly,it expounds the research background and research significance of the paper,analyzes the literature review of stock market opening and stock price fluctuation,foreign shareholding and stock price fluctuation,and clarifies the goal and direction of this research.This paper introduces the operation of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect,conducts a comparative analysis of the two-Hong Kong Stock Connect and QFII and QDII models,and introduces the current situation of foreign shareholding.Secondly,it introduces noise trading theory,herd effect theory and positive feedback trading theory,and puts forward relevant assumptions.Finally,an empirical study is carried out on the relationship between foreign shareholding and stock price fluctuations.The research results show that there is a significant causal effect between the overseas capital inflow and the stock price change of listed companies,and the change of foreign ownership ratio is in step with the stock price change of listed companies.The change of foreign ownership will cause "herd effect" and "trading noise" in China’s stock market,thus having a linkage impact on domestic stock ownership and further aggravating the stock price fluctuations of listed companies.At the same time,for the separate verification of the sample data of Shanghai Stock Connect and Shenzhen Stock Connect,it can be concluded that the foreign shareholding ratio in the Shenzhen Stock Connect has a more significant impact on the changes of the company’s stock price.Foreign capital inflows have a significant impact on stock price fluctuations in cyclical industries,and foreign shareholding investment is more inclined to listed companies with large market capitalization.Therefore,the paper puts forward policy suggestions combined with the research results,hoping to provide reference and reference for relevant researchers.