Transmission Channels of Institutional Investors Participating in Corporate Governance

Using the SEM model and the data of the listed companies in China stock market,we study the transmission channels of institutional investors who participate in corporate governance.We find that institutional investors participating in corporate governance cannot contribute directly to company performance,but indirectly enhance it through constraining the controlling shareholder's tunneling.Furthermore,that the result suggests the enforcement of investor protection in the listed companies is the mediator between institutional investors participating in corporate governance and company performance,and it can effectively constrain the controlling shareholder's tunneling.However,institutional investors have no significant influences on non-pecuniary compensation and monetary compensation manipulation.It is then necessary to enhance enforcement of investor protection and perfect institutional investors' institution in favor of improving corporate governance.