Investor Protection Effect of ISC Participating in General Meetings

China Securities Investor Services Center (ISC for short) is an advocate and practitioner of minority shareholder activism, so it is of great research significance and practical value to explore whether ISC exercising contributes to the protection of the interests of minority investors. Based on the exercising data by ISC participating in general meetings from 2017 to 2019, PSM method and DID model were used to analyse the relationship between ISC participating in general meetings and minority shareholder protection. The results showed that: (1) The participation in general meetings of ISC had the investor protection effect, and the realization of this investor protection effect was a result of the fact that ISC exercising encouraged more minority shareholders to exercise their shareholder rights; (2) By distinguishing the types of general meetings, it was found that the investor protection effect of ISC participating in annual general meetings was more significant. By distinguishing the characteristics of corporate governance, it was found that ISC exercising could replace other governance mechanisms to protect minority shareholders’ interests; (3) The participation in general meetings of ISC had a spillover effect on the firms with executives’ ties, and caused significant positive market reaction, showing that ISC exercising had positive externalities. The findings of this study suggest that the participation of ISC in general meetings plays an important role in protecting interests of minority investors.