Law And Finance Theory And Empirical Analysis In China's Security Market

Law and finance theory is a theory researching the impacts of law to financial system and economic growth. La Porta, Lopez-de-Silanes, Shleifer and Vishny(LLSV) found that investor protection in common law countries is better than the one in civil law countries. They also researched the reasons of different legal origins made different investor protection, and the impacts of the differences to capital markets, corporate governance and so on. Levine et al. researched the impacts of law to financial development and economic growth in different countries. Many scholars studied the theory and proposed some challenging theories.This paper firstly studies the research areas and theoretical basis, and then makes a review of law and finance theory, through which we find a researching blind spot. This paper refers to the research methods of LLSV(2002), using the panel data of our listing companies and a better investor protection index(rule of law and legal efficiency) to make a empirical study in China's security market. Finally, some recommendations to the development of China's security market relying on the law and finance theory are proposed.The innovation of this paper is that making a comprehensive review and comment of law and finance theory, and using a better investor protection index in the empirical study. The result is satisfactory, which reveals the important impacts of investor legal protection to dividend policy. Meanwhile, there also exists many shortcomings in this paper which can propose challenges to our conclusion, for example in the data choosing and the law index.