Ownership Concentration、Investor Protection And The Cost Of Equity Capital

Since the establishment of China’s securities market, it has made great development, but at the same time, there are more and more problems. In recent years, the theory and practice circles gradually put focus on the issue of investor protection. In this paper, when "the country’s law" is sure, we research company’s governance, including the country’s law, local’s law, Ownership concentration and the nature of shares. We also give measures and suggestions on how to improve the ownership structure and protect the interests of investors, with a view to provide a little information on how to better protect the interests of investors.First of all, this article summarized the relevant theory about Ownership concentration Investor Protection And the Cost of equity capital, then describe China’s current about them, and analysis it.Secondly, take an empirical research on the basis of theoretical analysis. Take all the Shanghai and Shenzhen A-share listed companies in2008-2010as the sample, on the basis of relevant assumptions, verify the relationship between the Ownership concentration Investor Protection and the Cost of equity capital. In the setting of related variables, we introduced the company size, company performance, financial risk such as control variable.In the empirical part, first of all, we make an initial descriptive statistics about all the variables, and then, use the relevant analysis method to study the correlation about variables.This paper argues that in Stock market, the ownership concentration and state owned equity also are large, and the law can not protect the owners. In this paper, the writer put ownership concentration investor protection and the Cost of equity capital together. Ownership concentration is large when the legal can not protect investors, shareholders have to pursue their own interests, and there is negative relationship between it and the Cost of equity capital, but not in the state-owned enterprises. Since the sample is different from the previous, the results also are not same.