Constructing Evaluation Index System For Protecting Interests Of Small And Medium Shareholders Of Manufacturing Listed Companies

After the basically completion of the non-tradable shares reform, the operationrules of China’s stock market have been quietly changed. China’s stock market takesthe new important responsibility of protecting the medium and small investors’interests are not infringed. In the development process of stock market, the reasons ofwhy medium and small investor protection level is relatively low can be summarizedas follows: capital occupation of major shareholders, illegal loans guarantee for themajor shareholder or related party, unfair related party transactions，the controllingshareholder is listed as a whole, inject non-quality assets into listed companies andnot standardized information disclosure.The existing literature on medium and small investor protection based onmicro-level of the corporate governance and constructing a suitable Composite indexfor the different company of same country of same industry is very few. In this paper,a relevant summary and innovation is based on the research of domestic and foreignscholars for protecting medium and small investors, and construct a suitableevaluation index system for protecting the interests of the medium and small investors,and closely related to manufacturing industry of our country. The construction ofindex system is not only beneficial to the stakeholders to evaluate the level ofprotection of the interests of the medium and small investors of a company, andprovides necessary information for the investment decision-making; but also for thecompany to understanding the deficiencies in the protecting the interests of themedium and small investors, and make improvement on it.In this paper, a research on the protecting the interests of the medium and smallinvestors of manufacturing listing company on2009-2011in Shenzhen and Shanghaistock market found that: firstly, there is a large gap on the level of medium and smallinvestors interests protection between China and Europe and the United States;secondly, With the development of stock market in our country, interest protection of medium and small investors have become more and more important, the results ofempirical research also shows that in our country medium and small investor’sinterest protection levels also increase year by year, and this result is consistent withthe trend of our country’s stock market development. Lastly, based on the researchresult, controlling shareholder’s behavior is the most important factor, so in order toprotect the interests of medium and small investors are not infringed, it is necessary tostrengthen constraint of the controlling shareholders behavior.