On the Gaming Behavior of Institutional Investors’ Participation in Corporate Governance

Abstract

Following the very rapid development of the real manufacturing economy in China, institutional investors in China have been expanding rapidly, which is of positive significance for standardizing the financial market and promoting the reform of the market economy and the development of the manufacturing economy. At present, pension funds as well as mutual funds in China take the lead, and investors from various institutions are directing the domestic securities market to implement the institutionalized physical reform of the investment body.  However, much of the current equity of enterprises in China, especially most private enterprises, is held by controlling shareholders, with less equity held collectively by these institutional investors. Moreover, with the imperfection of our domestic capital management market, institutional investors tend to be even less motivated as well as less concerned about participating in corporate governance. How to promote the governance effectiveness of institutional investors has been the focus of experts and scholars in the development process of enterprises. Therefore, focusing on the gaming perspective, this paper analyzes in depth the factors that affect the governance behavior of institutional investors, and puts forward relevant suggestions based on the above issues, aiming to give full play to the effectiveness of governance of each institutional investor in enterprises.