Abstract:
Understanding how institutional investors exercise active shareholder roles to improve the operational and managerial effectiveness of listed companies holds significant importance both academically and practically. Using delisting risk as the research focal point, this study examines Shanghai and Shenzhen A-share listed companies as the sample. From the perspective of institutional investor network interactions, our findings demonstrate that common institutional ownership mitigates the delisting risk of listed companies. The mechanisms of action are as follows: First, they actively participate in corporate governance, fully exerting their role in suppressing earnings management and controlling shareholders' tunneling. Second, they require management to standardize financial report disclosure and improve corporate information transparency, while providing intra-group information to help management adjust strategic orientation timely and avoid capital losses. Third, they create resource synergy effects by improving bank-enterprise relationships, promoting strategic cooperation, and providing financial support, thereby helping companies improve fundamentals and enhance their ability to cope with risks. Fourth, they send positive signals to the market, attracting more investors to trade company stocks and improving stock liquidity. Heterogeneity analysis shows that when companies belong to non-high-tech industries, are state-owned enterprises, are located in regions with sound legal environments and high marketization levels, and receive more media attention and analyst coverage, the inhibitory effect of common institutional ownership on corporate delisting risk is more significant. This paper provides insights for fully leveraging the positive role of institutional investors and promoting high-quality development of capital markets.
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