Institutional investor shareholdings and corporate financialization behavior

Abstract

The increasing financialization of the Chinese economy has had a significant impact on both the expansion of financial markets and the development of business operations. Research has shown that institutional investors' shareholdings can be strongly correlated with the financialization of a business. The paper is divided into three parts. First, this essay collates the influence of institutional investors on corporate governance, corporate performance and corporate innovation. Secondly, it reviews the context of corporate financialization and its impact on the management of private sector funders, multiple large shareholders and house price volatility. The paper then presents the existing literature on the connection between board age and corporate innovation. Ultimately, according to all the literature, the paper outlines that the results may vary in capital markets at different levels of development; and that it may be possible to analysis the link between institutional investors and the financialization of firms by cutting through the business model of family firms and digital finance.