Analysis On The Applicability Of Law And Finance In BRICS Countries

The driving force of the BRICS countries' economic development has always been the hotspot of academic research.Law and finance advocate the level of legal protection for investors' rights is the most important reason in financial development among different countries.This view provides new insights for our research.However,some scholars have pointed out that BRICS countries,which are also emerging market countries,have their own specific paths and models in the economic development,so law and finance do not apply in BRICS countries.This article will analyze and verify the applicability of law and finance in BRICS from two aspects.From the portrait angle,verify whether the improvement of the legal protection of minority shareholders' rights in BRIC countries has a positive effect on the development of their financial markets.Firstly,we sort out the legal reforms that BRIC countries have made in protecting the rights of minority shareholders'.According to the law and finance,we find the level of protection of the rights of minority shareholders' increases year by year in BRICS countries';secondly,The intuitive performance of the development of financial markets is the improvement of the financing efficiency of the stock market.With the help of the DEA model,the quantitative evaluation of the financing efficiency of the BRICS countries' stock markets revealed that the financing efficiency of the countries has also shown a trend of increasing year by year.Finally,By comparing the year when the reform of the legal system was carried out by the BRICS countries with the significant improvement in the financing efficiency of the stock market,it was found that the two were basically the same.This shows that the reforms made by the BRICS countries in improving the legal protection level of shareholder rights have played a role in promoting the development of financial markets.From the horizontal angle: verify whether the legal protection level of investor rights in BRICS countries matches the development level of their financial markets.According to the theory of law and finance,there should be a positive correlation between the level of legal protection and the degree of financial market development.For the evaluation of the level of legal protection,in the legislation,we use the “anti-director rights” indicator of law and finance for evaluation,in law enforcement,we draw lessons from two evaluation indexes,namely,the efficiency of judicial system and the quality of contract execution.Judging from two aspects of law enforcement evaluation,the legal protection level of investors' rights in BRICS countries from high to low is India,South Africa,China,Brazil,and Russia.For evaluation of financial market development level,we use the stock market financing efficiency as an indicator.From the verification results of the first part,we can see that the ranking of the financing efficiency of the BRICS countries' stock markets is South Africa,India,Brazil,China,and Russia;the ordering of the legal protection level of investors' rights in BRICS countries is inconsistent with the ranking of the degree of development of the financial market.Under the evaluation system of law and finance,the protection level of investor rights between BRICS countries does not match the level of financial market development.Introducing a sub-indicator of the World Governance Index(WGI),which is more comprehensive in the evaluation of law enforcement,as a basis for assessing the quality of law enforcement,and integrating them with the evaluation results of legislative protection in the BRICS countries,and finding out its ranking and evaluation of BRICS evaluations.The ordering of financing efficiency in BRICS countries' stock markets is consistent,and the difference between the rule of law indicators and the evaluation indicators of law and finance on the quality of law enforcement is the level of protection of investors' property rights,indicating the protection of investor rights plays a important role in the development of financial market in BRICS countries.In summary,it is concluded that the theory of law and finance is applicable in the BRICS countries,but there are also certain specificities.The improvement of the level of protection of investor rights can promote the development of the BRICS financial market,Compared with the efficiency of judicial system and the quality of contract execution,the protection level of investor property rights is more restrictive to financial development.Therefore,while the BRICS countries improve the weak points in the “anti-director rights” indicator,they should also strengthen the protection of investors' property rights so as to increase the confidence of investors in investing and thus promote the development of finance.As one of the BRICS countries,China is still ahead of other BRICS countries in the “anti-director rights” indicator.However,there are still problems in the protection of investors' property rights.It is manifested in three aspects: the unclear agency relationship of state-owned property rights leads to the loss of state-owned assets;and the illegal seizure of the legal property rights of private enterprises under the leadership of public power;and the protection of intellectual property rights is poor.Therefore,our country should learn from Temasek model to improving the reform of state-owned enterprises,reduce the intervention of administrative,improve the efficiency of dealing with property,and increase the cost of infringement of intellectual property rights to improve the protection level of investors' property rights,so as to improve the level of protection of investor rights,and to promote the development of economy.