Shareholding Preference of Institutional Investors and the Information Disclosure Quality of Listed Companies

What both domestic and foreign researchers have been concerned about is that whether institutional investors can make effective shareholding decisions. This paper selects the data of Shenzhen A-share listed companies from 2008 to 2012, and uses static and dynamic model respectively to test the influence of the listed companies' information disclosure quality on the institutional shareholdings. The results of the empirical study show that the institutional holdings are sensitive to the information disclosure quality. On one hand, the institutional investors prefer the companies with higher quality of information disclosure. On the other hand, their response in shareholding decisions according to the quality's annual changes. Therefore, the listed companies making information disclosure policy need to consider the attention of institutional investors, and that using institutions' shareholding decision to promote the building of companies' information disclosure system will contribute to the policy-making in the capital market.