Study On The Political Mechanism And Adaptability Mechanism Of Investor Protection In China

At present, law and finance has been internationally at the forefront of research into the financial development theories. With the growing attention to law and finance, research into the structure of property rights, investor protection, financial development and other related issues is gradually becoming one of the focuses of economics research. Though breakthrough progress has been made in the empirical research on the significant correlation between the legal system to protect the interests of investors and financial development, in-depth analysis of the interacting mechanism at macro-and micro-levels is still lacking. While the relevant literature is mostly focused on summarizing the practice in the developed countries, the research into transition countries is still very scarce. From the research perspective of the political mechanism and adaptability mechanism of investor protection under transitional economic conditions, the paper is focused on the investigation into the specific mechanisms of political mechanism and adaptability mechanism of investor protection in the course of China's financial development.After defining the related concepts and sorting out the existing literature comprehensively, this paper builds models to illustrate the importance of the political mechanism and adaptability mechanism of investor protection to corporate value enhancement and financial development. Subsequently, the paper is based on the political mechanism to build and use a state utility function to analyze the changing course of China's financial system in the past 30 years, and reaches the conclusion that the influence of political mechanism of investor protection in China was significant—the tremendous impact of the state's biased protection of property rights on China's financial development. Then the paper is based on the adaptability mechanism to analyze China's legal tradition and previous legal transplants, and comes to the conclusion that the influence of the adaptability mechanism of investor protection in China was not obvious—the frequently-changed law type undermined social adaptability in China's law system, and further brought forth a negative impact on the protection of financial property rights and financial development. Finally, on the basis of analysis of the political mechanism and adaptability mechanism of investor protection, aimed against the investor protection issues of China's serious asymmetric protection of property rights and company insiders' misappropriation in financial markets, the paper puts forward several suggestions including withdrawal of state opportunism and reconstruction of law system, reform of financial property rights and capital market opening, and the combination of active and passive law enforcement.The main contribution of this paper is: break through the limits that the existing literature on law and finance was focused unilaterally on empirical research and ignored the mechanism at macro-and micro- levels, and has made a bold attempt in the field; analyze the migration processes and characteristics of the China's original legal system, and probe into the social adaptability and impact of China's law system; and, aimed against the current poor situation of investor protection in China's financial markets, put forward a financial law enforcement mode, the combination of active and passive law enforcement, which is forward-looking to some degree.