Investors or Speculators: Institutional Investors' Role in Governance from Corporate Performance

With the growth of institutional investors in China, recognizing the role of institutional investors in the company governance has been becoming the basis of formulating relevant policies for regulator apartment. In this paper, play games show that institutional investors play the role of speculators or investors largely depends on the proportion and time of their shareholding. We use listed companies which have institutional investors' holdings from 2004 to 2007 year as samples. The results found that: institutional investors showed investors' role in the listed company which have higher proportion of institutional ownership or long-term shareholding. Contrary to expectations, the short-term shareholding institutional investors also showed investors role; further study found that institutional investors play role of speculators and investors majorly depends on proportion of their holding.