The Impact of Investor Protection Laws on Corporate Policy and Performance
Date Issued
2015
Date
2015
Author(s)
Kang, Shu-Huai
Abstract
Recent studies pay significant attention on the association between investor protection and corporate policy and performance. Results show that increased investor protection induces firms to increase dividends, to issue equity, and to grow in size. The investor protection laws also increase the availibility of external financing and arguably improve performance. On 1 January 2003, Taiwan enacted the Securities Investor and Futures Trader Protection Act, and subsequently established the Securities and Futures Investors Protection Center. This dissertation thus exploits the passage of the Securities Investor and Futures Trader Protection Act, along with other investor protection laws adopted during the same period, to find out whether, the enaction of the investor protection laws in Taiwan would induce firms to increase dividends payout, equity issuance, long-term debt, assets, and to grow in size. The empirical results show supporting evidence that the passage of investor protection laws has impact on corporate policy, and induces firms to increase dividends payout, to raise capital through equity or long-term debt, and to grow in size.
Subjects
Investor protection law
Dividends policy
Equity issuance
Firm size
Long-term debt
Corporate performance
Type
thesis