Collective psychology in corporate governance: How it affects investor behaviour in capital markets

In recent years, with the deepening of China's capital market, the impact of collective psychological characteristics in corporate governance on investor behavior has become increasingly prominent. Taking Shanghai and Shenzhen 300 listed companies as samples, this paper systematically analyzes collective psychological variables such as decision-making convergence, management optimism bias, shareholders' emotional resonance, information transparency and governance structure adaptability, and reveals their multi-dimensional impacts on investors' shareholding ratio, trading frequency and risk preference through dynamic panel regression and grey correlation analysis methods. It is found that board decision convergence has the most significant positive effect on institutional investors' shareholding stability, while management optimism bias significantly exacerbates short-term volatility and speculative behavior in the market. Shareholder sentiment resonance is particularly pronounced in small and mid-cap firms, amplifying market volatility. Information transparency and governance structure adaptability, on the other hand, enhance the rational decision-making basis of professional investors by reducing information asymmetry and enhancing governance efficiency. The time-series results show that the impact of collective psychology on the capital market is gradually increasing with tighter regulation and optimized investor structure.