Judicial quality and corporate value: evidence from China’s judicial reform
This study employs China’s judicial reform as a quasi-natural experiment to examine how judicial improvements affect corporate value. The findings reveal that: (1) compared with companies that were not affected by judicial reform, the market value of companies affected by judicial reform increased b...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2024-07-01
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| Series: | China Journal of Accounting Studies |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/21697213.2025.2471415 |
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| _version_ | 1849334250539581440 |
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| author | Sirui Wu Bo Cheng Zongtao Tian Qinglu Jin |
| author_facet | Sirui Wu Bo Cheng Zongtao Tian Qinglu Jin |
| author_sort | Sirui Wu |
| collection | DOAJ |
| description | This study employs China’s judicial reform as a quasi-natural experiment to examine how judicial improvements affect corporate value. The findings reveal that: (1) compared with companies that were not affected by judicial reform, the market value of companies affected by judicial reform increased by 6.62%; (2) the reform drives corporate value through increasing investment, promoting innovation, reducing financing costs, and improving stock liquidity; (3) the effect is more pronounced for companies with poor internal control, weak board governance, low institutional investor ownership, and fewer analysts’ coverage. Our paper clarifies the causal effect between judicial reform and corporate value, complementing the previous literature on law and finance. This study bears consideration for China’s comprehensive promotion of the rule of law and the high-quality development of the capital market. It also provides empirical evidence for the necessity and importance of achieving the rule of law modernisation in emerging capital market countries. |
| format | Article |
| id | doaj-art-69a0869aba1c46e5a8c88c0a85f603a8 |
| institution | Kabale University |
| issn | 2169-7213 2169-7221 |
| language | English |
| publishDate | 2024-07-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | China Journal of Accounting Studies |
| spelling | doaj-art-69a0869aba1c46e5a8c88c0a85f603a82025-08-20T03:45:36ZengTaylor & Francis GroupChina Journal of Accounting Studies2169-72132169-72212024-07-0112364066110.1080/21697213.2025.2471415Judicial quality and corporate value: evidence from China’s judicial reformSirui Wu0Bo Cheng1Zongtao Tian2Qinglu Jin3School of Management, Xi’an Jiaotong University, Xi’an, Shaanxi, ChinaSchool of Accountancy, Nanjing Audit University, Nanjing, Jiangsu, ChinaSchool of Management, Southeast University, Nanjing, Jiangsu, ChinaSchool of Accountancy, Shanghai University of Finance and Economics, Shanghai, ChinaThis study employs China’s judicial reform as a quasi-natural experiment to examine how judicial improvements affect corporate value. The findings reveal that: (1) compared with companies that were not affected by judicial reform, the market value of companies affected by judicial reform increased by 6.62%; (2) the reform drives corporate value through increasing investment, promoting innovation, reducing financing costs, and improving stock liquidity; (3) the effect is more pronounced for companies with poor internal control, weak board governance, low institutional investor ownership, and fewer analysts’ coverage. Our paper clarifies the causal effect between judicial reform and corporate value, complementing the previous literature on law and finance. This study bears consideration for China’s comprehensive promotion of the rule of law and the high-quality development of the capital market. It also provides empirical evidence for the necessity and importance of achieving the rule of law modernisation in emerging capital market countries.https://www.tandfonline.com/doi/10.1080/21697213.2025.2471415Judicial reformcorporate valuecontract enforcementtransaction costcorporate governance |
| spellingShingle | Sirui Wu Bo Cheng Zongtao Tian Qinglu Jin Judicial quality and corporate value: evidence from China’s judicial reform China Journal of Accounting Studies Judicial reform corporate value contract enforcement transaction cost corporate governance |
| title | Judicial quality and corporate value: evidence from China’s judicial reform |
| title_full | Judicial quality and corporate value: evidence from China’s judicial reform |
| title_fullStr | Judicial quality and corporate value: evidence from China’s judicial reform |
| title_full_unstemmed | Judicial quality and corporate value: evidence from China’s judicial reform |
| title_short | Judicial quality and corporate value: evidence from China’s judicial reform |
| title_sort | judicial quality and corporate value evidence from china s judicial reform |
| topic | Judicial reform corporate value contract enforcement transaction cost corporate governance |
| url | https://www.tandfonline.com/doi/10.1080/21697213.2025.2471415 |
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