Securities litigation has become a common topic around the globe. As recognized, within the framework of securities enforcement, private litigation serves as a significant supplement to public enforcement. Distinct from systems in other jurisdictions, Chinese securities litigation features a dependence on public enforcement. However, obtaining a decision from public authorities does not necessarily ensure compensation. Many cases have been dismissed  despite satisfying the public enforcement  requirement, so it seems that other variables are also in play.

What shapes securities litigation in China is the main concern of this research project. By answering this question, the research helps to better assess the effectiveness of securities litigation in realizing investor protection. I utilized both quantitative and qualitative methods, incorporating multi-variable regression as the main methodology, supplemented by qualitative methodologies. The employment of multiple methodologies reduces bias due to a small sample, as do the diverse perspectives engendered via qualitative methodology.

The major finding of the empirical study is that in addition to the influence of public enforcement, the considerations of social stability, local economic development, and the contemporary market conditions do shape the outcomes of securities civil cases in China. The result, to some extent, evidences a “piggy-back” effect on public enforcement, while local protectionism policies and a bad market sometimes might generate more conservative decisions.

The thesis is divided into seven parts. After giving a brief introduction of the academic background  and research design, I will tease out the existing literature, examining contentious issues and the corresponding arguments. The third part will provide a basic legal framework for securities false statement litigation and the fourth part will map out research methodologies. Next, I will exhibit the analysis output of the research, first proposing theories and then displaying the multi-variable regression output along with the findings. To provide more explanations, the thesis will then focus on more discussions combined with evidence obtained after the application of other methods. The final part of the thesis draws a conclusion for the research, with suggestions and future prospects.