An Empirical Study on the Relationship between Investor Protection, Government Behavior, and Financial Development

Chien-Chi Chu, Sang-Bing Tsai, Yinghui Chen, Xiyang Li, Yuming Zhai, Quan Chen, Zeng Jing, Zeng-Zi Ju and Bin Li
Additional contact information
Chien-Chi Chu: Department of Finance, Shantou University of Business School, Shantou 515063, China
Sang-Bing Tsai: Zhongshan Institute, University of Electronic Science and Technology of China, Zhongshan 528400, China
Yinghui Chen: School of Accounting, Zhongnan University of Economics and Law, Wuhan 430073, China
Xiyang Li: Department of Accounting, Finance and Economics, Griffith University, Brisbane 4111, Australia
Yuming Zhai: School of Economics and Management, Shanghai Institute of Technology, Shanghai 201418, China
Quan Chen: Zhongshan Institute, University of Electronic Science and Technology of China, Zhongshan 528400, China
Zeng Jing: School of Economics & Management, Tongji University, Shanghai 200092, China
Zeng-Zi Ju: Department of Finance, Shantou University of Business School, Shantou 515063, China
Bin Li: Department of Accounting, Finance and Economics, Griffith University, Brisbane 4111, Australia

Sustainability, 2017, vol. 9, issue 12, 1-14

Abstract: We studied the relationship between investor protection, government behavior, and financial development using data covering six provinces (Guangdong, Jiangsu, Shandong, Zhejiang, Henan, and Sichuan) and two provincial-level cities (Beijing and Shanghai) in China for the period 2005–2014. Using panel data estimation techniques, we found that there is a positive relationship between investor protection and financial development; by contrast, highly-intense government intervention leads to more financial impediments. Moreover, government intervention in education could promote financial development through its contribution to having a higher amount of the fund supply. Our empirical findings have important implications for policy-makers in terms of reforming the capital market regulation.

Keywords: investor protection; government behavior; government intervention; sustainability; financial development; economic growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:9:y:2017:i:12:p:2199-:d:120851

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