Large Institutional Investors'"Granular Nature"in China and Corporate Value
In view of the fact that there is almost no literature on whether large institutional investors in China's capital market are"Granular"and whether they produce"Granular Effect",this paper chooses China's A-share listed companies from 2005 to 2021 as samples to study the impact of large institutional investors on corporate value in China.From the perspective of corporate governance,it also tests whether large institutional investors in China's capital market are"granular"and whether they have"Granular Effects"on corporate value.It is found that large institutional investors in China's capital market are"Granular"and have a"Granular Effect"on corporate value.The influence of large institutional investors on corporate value is greater than that of the same size group made of other small independent organizations,and the economic impact is obvious.Take the top 10 large institutional investors and their same size group made of other small independent organizations as an example.When the shareholding ratio of the top 10 large institutional investors increases by one standard deviation,the corporate value will increase by 8.06％(4.0252x0.0265/1.3229)standard deviation.When the shareholding ratio of the top 10 large institutional investors'same size group made of other small independent organizations increases by one standard deviation,the value of the company will increase by 3.80％(1.5973× 0.0315/1.3229)standard deviation,and the former is 2.12 times that of the latter.According to the mechanism test,large institutional investors excavate more abundant and comprehensive information through more active research to enhance the deterrent effect,make use of the advantages of capital scale to carry out concentrated trading,provide sufficient liquidity to the investment target company,so that the stock price of the target company can quickly return to the intrinsic value,improve the governance effect of the overall"Exit Threat"of institutional investors,and thus enhance the corporate value,playing the"Granular Effect".The research conclusions of this paper have the following implications.First,when relevant scholars and government departments evaluate the real role and size of institutional investors in the future,they should fully consider the positive role of large institutional investors in promoting corporate value and the"Granular Effect"generated,so as to more comprehensively and accurately evaluate the real role of large institutional investors in China's capital market.Second,in view of the positive role played by large institutional investors in the"Exit Threat",it is necessary to strengthen the policy support of large institutional investors to continuously improve and strengthen,encourage them to invest intensively to increase the proportion of shares held by portfolio companies,and promote large institutional investors to not only play the deterrence role of"Exit Threat,"but also play the governance role of"Voting by Hand."Third,investors should join the perspective of"Granular Nature"and"Granular Effect"of large institutional investors to comprehensively evaluate the positive role played by asset management giants in China's capital market.They can make appropriate use of the powerful information advantages and pricing role of asset management giants to help them evaluate the value of the investment target company.Fourth,for listed companies,they should pay attention to long-term development,create their own advantages,vigorously develop and strengthen the core competitive advantages of the company,so as to greatly improve the value of the company,and actively disclose high-quality information,so as to attract large institutional investors to take long-term heavy positions or continuously increase positions of the company,so as to further greatly enhance the value of the company,and create wealth for the company's major shareholders and the majority of small and medium investors.Fifth,in view of the"Double-edged Sword"role played by asset management giants in the US capital market,when cultivating world-class asset management institutions with Chinese characteristics under the background of the financial power strategy,it is necessary to adhere to and strengthen the overall leadership of the Party for these institutions,to make their political position firm and strong,and truly be mindful of"the greatness of the country".That is,it can shoulder its mission and have strong global influence,contribute due positive force to the construction of a financial power and a community with a shared future for mankind,and prevent its harm to China's capital market and even the global capital market.
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