Law-Enforcement Analysis Of Listed Companies' Misrepresentation

There exists an ignored phenomenon of selective law-enforcement favored by government, though previous studies have noticed the incompleteness or immatureness of law, high enforcement cost and the malfeasance of the agents. Different disposal according different circumstances is the characteristic of selective law-enforcement.Classic law-enforcement literature cannot explain this phenomenon considering only direct enforcement cost and direct harm. So this dissertation tries to take indirect enforcement cost and indirect harm into consideration as well. The rights to change with circumstances is different from the residual rights of control proposed by Grossman & Hart(1986) and residual rights of legislation proposed by Pistor & Xu(2002,2003), both of which result from high information cost in uncertain world and so cannot prescript in detail ex ante. The right not to enforce the law stiffly is introduced as residual law-enforcement right in this dissertation. Selective law-enforcement is especially popular in security market, so this dissertation focuses on it to explain.Since LLSV(1997,1998) found the significance of law for the development of security market, the role of law draws many economists' attentions. But contrast to the law having been built, the crystal enforcement of law frustrate the development of security market greatly. This dissertation focuses on the selective enforcement of law proposed by government rather than the malfeasance by agents.On the other hand, we have built a great complete law, though, there is still far road to reach rule of law. What is the key problem? This dissertation emphasizes the constraint faced by government. It is the deficiency of limit to government power that result in selective law-enforcement analyzed by this dissertation.