An exploratory study on the perception of minority shareholders' legal protection in China

La Porta et al. conducted a cross-country empirical study and found that ownership concentration is exceedingly high in their sample of 49 countries, given that in an average country about half the equity of a publicly listed firm is owned by the three largest block shareholders. They added that this is associated with weak legal protection of shareholders. Therefore in countries with inadequate legal protection of investors, concentrated shareholdings could reduce agency problems. Furthermore, they pointed out that an effective way to reduce opportunities for expropriation was to improve legal protection of the rights of outside investors or minority shareholders