A Review of Research on the Exercise of Rights by the China Securities Investor Services Center and Corporate Debt Default Risk

Yu Li

doi:10.62051/ijgem.v10n6.02

Authors

Yu Li China-ASEAN School of Economics, Guangxi University, Nanning 530004, China

DOI:

https://doi.org/10.62051/ijgem.v10n6.02

Keywords:

Investor protection, Debt default risk, Investor Services Center, Corporate governance, Capital market risk

Abstract

As China's corporate bond market continues to expand, corporate debt defaults have gradually become common events. Leveraging capital market institutions to improve corporate credit risk prevention and control mechanisms holds significant practical value for maintaining financial market stability. Existing studies have primarily examined the corporate governance and market reaction effects of the China Securities Investor Services Center's exercise of rights, confirming its role in regulating listed firms' behaviors and optimizing the capital market governance ecosystem. While its external governance value has been verified from perspectives such as information disclosure, agency governance, and financing constraints, systematic research on how the Center's exercise of rights affects corporate debt default risk remains limited. This paper systematically reviews relevant literature, analyzes the governance logic of the Center's exercise of rights on corporate debt default risk through multiple channels, summarizes the shortcomings of existing research, and proposes future research directions. It aims to provide implications for capital market credit risk governance and related academic research.

Downloads

Download data is not yet available.

References

[1] La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2006). What works in securities laws? The Journal of Finance, 61(1), 1–32. https://doi.org/10.1111/j.1540-6261.2006.00828.x

[2] Gan, Y., & Li, Z. F. (2023). The exercise of rights by the China Securities Investor Services Center and controlling shareholders' interest misappropriation: Evidence from related-party transactions. Financial Research, 49(11), 80–94.

[3] Ni, B. L., Li, X., Xiao, S. F., & Xia, N. (2025). The exercise of rights by the China Securities Investor Services Center and bond credit spreads. Contemporary Finance, (1), 1–16.

[4] Chen, K. J., Jiang, L., Xiong, X., et al. (2024). Can minority shareholders monitor major shareholders? Evidence from "regulatory minority shareholders". Accounting Research, (1), 152–163.

[5] Wang, S. L., & Lai, L. Q. (2024). Does the expansion of the central bank's collateral framework affect corporate debt defaults? Credit Reference, 42(12), 62–76.

[6] Liu, Y. Y., & Guo, S. J. (2022). Short-term borrowing for long-term investment, bank-firm linkages, and corporate debt default risk. Finance and Economy, (10), 69–78.

[7] Chen, Y. S., Yuan, W., & Li, Z. (2021). Effectiveness of regulatory minority shareholders' rights exercise: Empirical evidence from the China Securities Investor Services Center. Management World, 37(6), 142–158, 9, 160–162.

[8] Tang, X. D., Chang, H. X., Ren, B. Z., & Peng, Z. (2023). Regulatory minority shareholders and stock price crash risk: Evidence from the China Securities Investor Services Center's rights exercise. Systems Engineering Theory and Practice, 43(6), 1610–1629.

[9] Chen, K. J., Xiong, X., Yang, G. C., & Zhang, W. (2022). The China Securities Investor Services Center's rights exercise and alleviation of investors' information disadvantage: Evidence from stock price crashes. The World Economy, 45(9), 204–228.

[10] Ma, Y. Q., & Chen, W. Z. (2025). Can minority shareholder activism improve analysts' earnings forecast quality? Nankai Management Review, 28(7), 173–184.

[11] Zhang, Y. C., Sun, G. G., & Yuan, Y. (2022). Can accounting information comparability mitigate corporate debt default risk? Journal of Central University of Finance and Economics, (7), 48–60.

[12] Zhi, X. Q., & He, T. R. (2010). Relationship between disclosure quality and equity cost. China Soft Science, (12), 125–131.

[13] Zhao, H. Q., & Chen, X. G. (2015). Disclosure quality and debt financing costs: Evidence from China's securities market. Accounting Friend, (16), 66–70.

[14] Zhang, W. F., & Jin, X. Y. (2018). How does information disclosure affect corporate innovation: Evidence and mechanisms. World Economic Review, (6), 102–119.

[15] Xu, Z. H., & Zhou, Z. F. (2016). Impact of financing-driven earnings management on corporate credit risk. Management Review, 28(7), 12–21.

[16] He, Q., & Yang, S. H. (2023). Information disclosure quality, financing constraints, and corporate debt default risk. Finance and Accounting Bulletin, (18), 45–52.

[17] Yu, N. T., Miao, R. C., & Zhang, H. Y. (2024). Has the China Securities Investor Services Center protected minority shareholders' interests via shareholder rights exercise? Evidence from controlling shareholders' equity pledges. Accounting Research, (6), 87–101.

[18] He, H. H., & Fang, J. X. (2021). Governance effects of regulatory minority shareholders: Evidence from financial restatements. Management World, 37(12), 176–195.

[19] Xiong, J. C., & Tong, D. M. (2022). The China Securities Investor Services Center and investor protection: Evidence from information disclosure. Journal of Jiangxi University of Finance and Economics, (1), 32–46.

[20] Yu, N. T., Su, C., Wang, H., & Miao, R. C. (2025). Impact of the China Securities Investor Services Center's shareholder rights exercise on corporate leverage manipulation. Contemporary Finance and Economics, (8), 139–151.

[21] Wu, H. G., Liu, J., Gao, X. Y., & Gao, C. Y. (2025). Can the China Securities Investor Services Center's shareholding and rights exercise improve corporate internal control quality? Audit and Economic Research, 40(4), 74–83.

[22] Cheng, X. K., Yu, H. P., Sun, Q., & Liu, W. (2025). Do high default risk firms pay higher cash dividends? Evidence from major shareholders' expropriation of creditors' interests. Accounting Research, (7), 92–104.

[23] Yeh, Y. H., & Lee, T. S. (2010). Corporate governance and financial distress: Evidence from Taiwan. Corporate Governance: An International Review, 12(3), 378–388. https://doi.org/10.1111/j.1467-8683.2010.00792.x

[24] Li, L. (2018). Internal control deficiencies, corporate governance structures, and financial distress. Accounting and Finance Bulletin, (3), 103–107.

[25] Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American Economic Review, 76(2), 323–329.

[26] Li, M., & Wang, J. (2020). Internal control quality and corporate debt default risk. International Finance Research, (8), 77–86.

[27] Xu, Z. H., & Zhou, Z. F. (2016). Internal control, overinvestment, and corporate credit risk. Chinese Journal of Management Science, 24(9), 21–27.

[28] Yuan, M. S., & Wei, C. L. (2024). Minority investor protection institutional innovation and mitigation of listed firms' inefficient investment: Evidence from the China Securities Investor Services Center's shareholder rights exercise. Securities Market Guide, (8), 37–47.

[29] Zhou, D. H., & Xu, Y. L. (2024). Does the China Securities Investor Services Center's shareholder rights exercise affect corporate labor investment efficiency? Evidence from Chinese listed firms. Journal of Beijing Technology and Business University (Social Sciences), 39(4), 88–99.

[30] Li, W., Liao, W., & Tang, X. S. (2025). Can the China Securities Investor Services Center's shareholder rights exercise improve corporate M&A performance? Journal of Zhongnan University of Economics and Law, (6), 50–62.

[31] Li, X. J., Chen, S. P., & Xiao, S. F. (2025). Investor protection effects and spillovers of the China Securities Investor Services Center's rights exercise: Evidence from major asset restructurings. Journal of Beijing Institute of Technology (Social Sciences), 27(4), 148–161.

[32] Luo, J. H., & Li, Y. (2025). Governance effects of regulatory minority shareholders: Evidence from M&A performance commitments. Accounting Research, (8), 62–73.

[33] Chen, K. J., Xiong, X., Yang, G. C., & Zhang, W. (2023). Minority investor protection institutional innovation and capital market pricing efficiency: Evidence from the China Securities Investor Services Center's rights exercise. Economics (Quarterly), 23(6), 2297–2314.

[34] Ren, H., & Zhao, X. Y. (2023). Minority shareholder activism and capital market pricing efficiency: Evidence from the China Investor Service Center's rights exercise. Modern Economic Exploration, (12), 39–51, 82.

[35] Ding, Z. G., Liu, X. M., & Jin, L. (2023). Fintech and corporate debt default risk: Impacts, mechanisms, and heterogeneity. Journal of Xi'an Jiaotong University (Social Sciences), 43(3), 16–28.

[36] Hua, F. T., & Sun, S. S. (2025). Can firms' new-quality productivity mitigate debt default risk? Evidence from A-share listed companies. Contemporary Economic Research, (7), 111–128.