A Study On The Relationship Between Minority Investor Protection And Equity Structure

Researches on corporate governance indicates that in Chinese listed companies,the"predominance of state-owned shareholders"is the root cause of the expropriations.Along with the reform of equity segmentation,the absolute controlling position of state-owned shares is gradually weakened and regulations of Chinese capital market is aslo changed quietly.How to improve equity structure in order to protect minority investors must be a new challenge in new circumstances.However,previous researches hardly explore a composite index to analyze the actual level of minority investor protection in China,which is suitable for different corporations in one country.This paper concludes from lots of facts and makes a new evaluation of minority investor protection under the same laws , which is fit for our captial market, considering corporate organization and execution of political system,then,the study analyzes the relationship between the equity structure and investor protection with its quantitative index.This study examines the equity structure and the protection for minority investors of all the listed companies in the two stockmarkets of Shanghai and Shenzhen excluding financial firms over the span from 2005 to 2008.The empirical evidence suggests that in the period with poor law protection of minority investors,concentration of shares ,balance of multiple shareholders and the proportion of tradable A-shares are remarkably positive-related to minority investor protection,however,with which state-owned shares and legal-person shares are significant negatively correlated. These findings suggest that in later reform of non-tradable shares,we should tell"predominance of one shareholder"apart"predominance of state-owned shareholders",it also points out ,it is important in paying more attention to the construction of corporate governance,in order to coordinate the basis on benefits between relative controlling shareholders and public investors.