Dissertation > Economic > Economic planning and management > Enterprise economy > Corporate Financial Management

Study on the Influence of Institutional Investors’ Shareholding on the Value of Chinese Listed Companies

Author ShengZuo
Tutor PengShaoBing
School Southwestern University of Finance and Economics
Course Financial Management
Keywords Institutional investor Corporate value Positive Type Negative Type
CLC F275
Type Master's thesis
Year 2013
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· Background and purposeInstitutional investor is important to the capital market, it has more professional information gathering and analysis ability, richer investment experiences, and more adequate human resources than individual investor, these advantages allow it has a pivotal position in the securities market. After decades of rapid development, institutional investor has become a powerful leading force in the capital market, it not only makes the equity structure shift in mature capital market, but also plays an increasingly important role in corporate governance. In our country, the study about the institutional investor and corporate’ value is gradually increased in recent years, but due to the differences in our economic system and foreign, we can not blindly copy the mode and content of the abroad study. Contrarily, we should expand research be based on the actual situation of our country.At present, the research has got some achievements, but generally ignored three questions:(1) Usually, the different types of institutions are basically homogenization in existing studies, this will undoubtedly limit the explanatory power of institutional investors holding affect the value of listed companies;(2)"value creation" and "value discovery" are been overlooked, the increase of the company’s value may be by the holdings of institutional investors to improve corporate governance mechanism, may also because the institutional investors found the potential value by its powerful information process ability;(3) As a result of the share reform, the scale of China’s fund in2007increased by3times than2006, but existing research basically did not distinguish them, this will affect the accuracy of the results. In response to these problems, we need do further research about the relationship of institutional investors and companies’value, in order to promote the institutional investors and securities markets have a healthy development.There are three purposes of this study, first is to explore the impact of institutional investors on the value of the investment company, weather institutional investors shareholding can enhance the value of the company; secondly is to explore different types of institutional investors whether has different effects on the value of the company; the last is to explore the distinction between institutional investors’"value creation" and "value discovery" function.·Main contentsThis paper has been divided into six chapters, the following is a brief introduction to each chapter:The first chapter mainly introduced the background、purpose、research significance and so on.The second chapter viewed the related literature in China and foreign country of previous in the first place. Then proposed the breakthrough point of this article based on the literature.The third chapter is the theoretical basic and analysis. First, it introduced three theoretical basis that would influence the value of the company, followed it analyzed the impact factors of institutional investors to participate in corporate governance, these are scale of investment、business contact and external restrictions. Finally, on the basis of the basic theory and analysis, institutional The fourth chapter is a empirical design part, there are setting three assumptions on the basis of theoretical analysis. Then it is selecting the appropriate variables and building the model. At last, specifying the data sources and selection standards.The fifth chapter are empirical results and analysis, it use correlation analysis、multiple linearity test and regression analysis to test and verify the assumptions.The sixth chapter is the main conclusions, including research conclusions, the relevant policy recommendations and prospects.·Main research conclusions and contributionThere are three contributions of this article:first, it is using data of2007to2011to empirically test the relationship between aggregate shareholding proportion of institutional investors with the company value, and found a significant positive relationship between them. Secondly, from the holdings of the scale, business contacts and external constraints, institutional investors have been divided into positive type and negative type, in order to test the different influence of the value of listed companies. Than found that different types of institutional investors have different impacts on the value of corporate.The positive institutional investors holdings has a significantly relationship on the value of the listed companies, while the negative institutional investors’ effect is not obvious. Third, using the current index data and hysteresis to a value of indicator data regression comparative analysis,found that there is a significant positive correlation between the proportion of institutional investors holding the company’s current value, but a value of listed companies lag indicators are not obvious. Institutional investors not to participate in corporate governance to enhance the value of the company, but find the potential value of listed companies by its information advantage.

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