Abstract: The network information sharing of institutional investors can improve the ability of the invested enterprises to obtain the social resources through the promotion of information transmission and circulation in the network and the capital markets, strengthen the enthusiasm of the stakeholders to supervise the company management, effectively alleviate the financing constraints of enterprises, improve the information transparency, promote the innovation information transmission, so as to promote the enterprise innovation level. Based on the panel data of A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2007 to 2019, the empirical evidences show that the institutional network relationship can significantly improve the level of enterprise innovation. The nature of property rights plays a negative regulating role while the degree of market competition and the process of marketization play a positive regulating role respectively. The results of the action mechanism study show that the institutional network can realize the improvement of enterprise innovation level mainly through expanding commercial credit, improving enterprise innovation ability, enhancing corporate information transparency, increasing the innovation information transmission paths, and achieving the improvement of corporate innovation level. The results of the economic consequence test show that the institutional network can optimize the rational allocation of relevant production factors and improve the total factor productivity of enterprises by improving the level of corporate innovation.

Key words: the network of institutional investors, financing constraints, information transmission, firm innovation, total factor productivity