The exercise of China Securities Investor Services Center(ISC)is an important institutional innovation that combines proactive government intervention with efficient market mechanisms in the field of protecting minority shareholders in China.In this study,we take A-share non-financial companies listed on the Shanghai and Shenzhen Stock Exchanges from 2013 to 2022 as the research object,manually collect the data of ISC's exercises,and examine the governance effect of the exercise of ISC on the issue of inefficient investments by listed companies.We find that the exercise of ISC can significantly reduce the degree of inefficient investments by listed companies and the conclusion is still valid after a series of robustness tests.The mechanism test shows that the governance effect of the exercise of ISC is achieved through the roles of deterrence,corporate governance,and information governance.Further research shows that the governance effect is more significant when ISC uses the online exercise method,addresses over-investment issues,and exercises over non-state-owned companies or companies with two-position separation.The paper enriches the related research on the protection of minority shareholders and inefficient investments,providing important implications for promoting the high-quality development of listed companies and strengthening the supervision of listed companies.
minority shareholder protectionexercises of China Securities Investor Services Centerinefficient investmentinstitutional innovation
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