Journal des affaires commerciales et financières

Operational Risk, Fund Performance and Investors Protection: Evidence from China

Abstract

Robin H Luo

This paper investigates the operational risk, fund performance and investor protection in the seven years subsequent to the 2001 liberalisation of the Chinese open-end funds market. The empirical results indicate that the fund type and fund manager’s qualification are positively associated with selecting the Big 4 auditing firms, while the size and profitability of open-end funds are not. The results also indicate that the open-end funds audited by the Big 4 firms do not outperform the funds audited by non-Big 4 firms.