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| Evaluation and Effectiveness of the Protection of Rights and Interests of Medium and Small Investors in Chinese Listed Companies |
| GAO Ming-hua1, CAI Wei-xing2, ZHAO Xuan1 |
1.College of Economics and Business Administration & Research Center for Corporate Governance and Development, Beijing Normal University, Beijing, 100875;
2.Dongling School of Economics and Management, Beijing University of Science and Technology, Beijing, 100083 |
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Abstract It is of great significance to protect the rights and interests of medium and small investors in China. However, there are some problems with current researches on the evaluation in this regard, such as low standard of the evaluation criteria, inadequate evaluation index, subjective determination of index weight, inconsistent data, and separation of the laws and regulation regarding corporate governance from those concerning protection of investors’ rights and interest. In light of the basic theories and international norms about protecting rights and interests of medium and small investors, and the legislation and enforcement in China, the author builds a comprehensive index for the protection of rights and interests of medium and small investor from four aspects: the right to know, right to decide and supervise, profitable rights, and rights protection environment. The empirical results show as follows: Firstly, in the main, the rights and interests of medium and small investors are not well protected in China, with the passing rate being only 0.16%. Secondly, factors like geography, industry, ownership, listed plates have impact on protection of rights and interests of medium and small investors, but the influence is little. Thirdly, the scores on profitable right and the right to decide and supervise are much lower than the scores on the right to know and the right protection environment, and none of them reach the passing grade. Great efforts should be made in the four aspects. Fourthly, the protection index can significantly improve corporate performance, reduce liabilities rate, agency cost, collapse in share prices, and restrain earning management of the management.
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Received: 13 April 2016
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2016, Vol. 33 
