文档介绍：Capital Markets and Legal Development: the China Case
By Zhiwu Chen∗
Yale School of Management
September 12, 2003
Abstract
Recent research establishes a significant positive correlation between law and finance
(and hence economic growth), re-starting a debate on the “law matters” thesis. However,
which way the causality goes is still not clear. The purpose of this paper is to use the on-
going reform experience of China, especially its capital market experience, to examine
the direction of causality. First, we show that China’s recent experience is largely
consistent with Coffee's (2001) "crash-then-law" interpretation of this correlation. Indeed,
it is the large and clearly defined constituency of investors that has been a key driving
force behind much of the recent legal progress. The rights and economic interests of this
constituency have fundamentally challenged the traditional emphasis of the Chinese legal
culture on administrative and criminal sanctions, but not on civil litigation law. Second,
pare the different contributions to legal change made by the stock market and the
consumer product markets. We argue that capital markets are perhaps the most conducive
to the formation of a politically powerful constituency and hence more aggressive legal
change, because of (1) the higher degree monality among interested parties and (2)
immediately measurable and tangible damages. These two characteristics not only allow
investors to identify with each other more easily, but also create an ideal basis for more
debate in the media, which in turn promotes the development of a legal culture.
Key words: law and finance, legal reform, shareholder rights, product liability, capital
market development, economic development.
∗ Zhiwu Chen is a Professor of Finance at the Yale School of Management, 135 Prospect Street, New
Haven, CT 06520, USA; zhiwu.******@. The author would like to