Legal Governance,Investor Protection and Financial Fraud: Empirical Evidence from Listed Companies in China
Yuan Chun-sheng · China Industrial Economy · 2007
Based on a sample of 137 financial fraud listed companies and matched control no-fraud firms,this paper empirically tests the relationship between investors' legal protection and the likelihood of firm financial fraud.The main findings are as follows: the relationship between investors' legal protection and financial fraud is negative;the improvement of investors' legal protection has a negative influence on the likelihood of fraud.The policy meaning of these results is that the improvement of legal system is an important institutional arrangement used to strengthen investors' protection and prevent listed companies from financial fraud.