Study of the Influence of Corporate Governance Level on Investors’ Confidence

Xiaolu LI, Jieji LAI, Jian TANG


Stock market investment has the Sheep-Flock Effect, so investors’ confidence relates to the stability and healthy development of the stock market. The functional mechanism of investors’ confidence is complicated with many influential factors. This paper selects the factor of corporate governance level to investigate and study the great effect of corporate governance level evaluation on maintaining and increasing investors’ confidence from the perspective of investors. In this paper, the method to measure investors’ confidence and corporate governance level is improved, and the data of A-share companies listed in Shanghai Stock Exchange of China in 2011-2013 is selected as the sample to analyze the panel data. The results show that, the higher the corporate governance level is, the stronger investors’ confidence is; investors’ confidence is also influenced by the macro level of the market and the nature of various industries is different, so significances of influences of corporate governance level in different industries on investors’ confidence are not the same. At the same time, the empirical results show that investors’ confidence has a positive lag effect.


Investors’ confidence; Corporate governance; Infuluence study; Lag effect

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