Taking A-share listed companies from 2007 to 2020 as research samples, this paper empirically examines the impact of institutional investors' shareholding on violations of listed companies. The results show that the higher the shareholding ratio of institutional investors, the lower the possibility and frequency of violations of listed companies; There are complementary effects between institutional investors' shareholding and the market competition of products, which strengthens the governance effect of institutional investors' shareholding on violation tendency and violation frequency of listed companies. The conclusions provide reference for improving corporate governance and solving the violation problem of listed companies' violation.