Empirical Analysis On Investor Protection And Operational Performance Of Listed Companies

With 20 years'development, China's capital market has achieved a great deal of remarkable accomplishments and has made tremendous contributions to the social and economic development. Meanwhile, phenomenon of damaging investors'interests emerges in an endless stream because of inadequate protection of investors, and this will heavily restrict further growth of the capital market, or even leads to disjointedness of social funds'demand and supply, seriously confines the development of the real economy. In general, a good Investor Protection is the base of security industry's stable and sustainable development, Investor Protection is better, capital market develops better, efficiency of resource allocation and utilization is better, performance of enterprises is better, development of real economy is greater. Therefore, study of Investor Protection's situation, and its impact on Business Performance, and the regional differences of that relationship in China possess important practical significance and theoretical value.This master thesis took the companies listed in the Shenzhen Stock Exchange as samples, discussed the relationship between Investor Protection and Operating Performance from three areas, Information Disclosure, Marketization Conditions, and Ownership Structure. The contents and conclusions are as follows:Currently, scholars usually adopt a single index to measure a company's performance, taking Tobin Q, ROA and ROE for example. However, single index is not able to reflect the companies'actual operating results comprehensively; therefore, method of principal component analysis is used to establish a composite index based on companies'abilities of profitability, development, operating, and production. It is found that the operating performance of listed companies in China has been improving and increased by 50% within five years.Investor Protection is usually measured by Information Disclosure, Legal Protection, Institutional Equities, Ownership Structure and other indicators. Using the method of descriptive statistical analysis, the status of Investor Protection from the view of Information Disclosure, Market Index, and Ownership Structure is quantitatively discussed. The results show that no matter measured by Information Disclosure, Market Process or Ownership Structure; the listed companies have improved year by year, indicating that the protection of investors'interests is improving in China.Investor Protection has an important influence on the Operating Performance of listed companies, so this paper made an empirical study of the relationship between them, and got the following conclusions.Firstly, controlling Company Size, Debt-To-Asset Ratio, the proportion of Independent Directors, the state of combination or separation of the Chairman and General Manager, the proportion Managerial Ownership, the proportion of State-owned Shares and the number of the General Meetings, Board Meetings, and Supervising Meetings, three multivariate statistical models were built to discuss the influence of Information Disclosure, Market Conditions and Ownership Structure on business performance respectively. The results show that, firstly, Operating Performance is positively related to Assets, indicating the existence of scale effect; negatively correlated with Asset-Liability Ratio; also negatively related to State-Owned Shares and the longer the relationship turns more obvious; positively related to the Executive Shareholding. Secondly, the overall Operating Performance of enterprises has been improving, but the gap among companies is growing. The quality of Information Disclosure of listed companies is rising, and the gap is getting smaller and smaller; Market Process continues to be pushed forward, but the differences between provinces and regions are gradually increasing; Ownership Concentration is relatively high and only has little change;. Ownership Balance Ratio is very high, but it has been decreasing. Thirdly, Information Disclosure examination results and Business Performance are positively related; effect of Market Index on corporate performance is not significant, but the listed companies'average Performance is highest in the region where Market Index is the highest; Ownership Concentration and Operating Results are significantly positive; Ownership Balance Ration is negatively to Operating Results.Secondly, ordering to compare the intensity of the effects that three aspects of Investor Protection acting on Operating Performance of listed companies, this paper put the three aspects in a multivariate statistical model at the same time. The results show that the effect of Ownership Structure on listed Companies' Performance is the most obvious followed by quality of Information Disclosure, the impact of Market Conditions is the weakest.Next, this essay compared the differences of the influence that Investor Protection act on listed companies'Operating Performance in the East and Midwest. The results show that, the regional difference of the influence that Information Disclosure acts on the Company's Performance is getting more and more obvious over time; as the gap among listed companies'Governance level increases, difference of the influence that Ownership Structure acts on Operating Performance is gradually increasing; as to the influence of Market Process on listed Companies'Performance, the difference is not significant, but it is increasing in the long run.Finally, this paper made the political recommendations of Investor Protection and improvement of listed companies'Operating Performance based on the literature reviews and empirical researches.