Does the judicial independence affect foreign investment? Evidence from China

IF 7.4 2区经济学 Q1 BUSINESS, FINANCE

Finance Research Letters Pub Date : 2024-08-29 DOI:10.1016/j.frl.2024.106043

引用次数: 0

Abstract

This study empirically investigates the role of judicial independence in facilitating the entry of foreign-invested enterprises in China. Utilizing the judicial independence reform since 2014 in China as a quasi-experiment, we conduct a difference-in-difference (DID) strategy to estimate the effects of judicial independence on the influx of foreign investment and the underlying mechanisms. The findings suggest that bolstering judicial independence can significantly promote the entry of foreign investment. The yearly numbers of newly-registered foreign-invested enterprises increase by around 17.8 % in pilot cities. Judicial independence enhances the quality of adjudication that amplifying the protection of corporate property rights, consequently attracting foreign investment. Further analysis shows that bolstering judicial independence also causes structural change of foreign investment, including an increase in the proportion of small and medium-sized, sole proprietorship, high-tech enterprises, and enterprises from developed countries.

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司法独立会影响外商投资吗？来自中国的证据

本研究对司法独立在促进外商投资企业进入中国市场方面的作用进行了实证研究。以中国 2014 年以来的司法独立改革为准实验，我们采用差分法（DID）估计了司法独立对外资流入的影响及其内在机制。研究结果表明，加强司法独立能够显著促进外资进入。试点城市新注册外商投资企业的年增长率约为 17.8%。司法独立提高了判决质量，从而加大了对企业产权的保护力度，进而吸引了外商投资。进一步的分析表明，加强司法独立也会引起外商投资结构的变化，包括中小型企业、独资企业、高新技术企业和发达国家企业比例的增加。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Finance Research Letters BUSINESS, FINANCE-

CiteScore

11.10

自引率

14.40%

发文量

863

期刊介绍： Finance Research Letters welcomes submissions across all areas of finance, aiming for rapid publication of significant new findings. The journal particularly encourages papers that provide insight into the replicability of established results, examine the cross-national applicability of previous findings, challenge existing methodologies, or demonstrate methodological contingencies. Papers are invited in the following areas: Actuarial studies Alternative investments Asset Pricing Bankruptcy and liquidation Banks and other Depository Institutions Behavioral and experimental finance Bibliometric and Scientometric studies of finance Capital budgeting and corporate investment Capital markets and accounting Capital structure and payout policy Commodities Contagion, crises and interdependence Corporate governance Credit and fixed income markets and instruments Derivatives Emerging markets Energy Finance and Energy Markets Financial Econometrics Financial History Financial intermediation and money markets Financial markets and marketplaces Financial Mathematics and Econophysics Financial Regulation and Law Forecasting Frontier market studies International Finance Market efficiency, event studies Mergers, acquisitions and the market for corporate control Micro Finance Institutions Microstructure Non-bank Financial Institutions Personal Finance Portfolio choice and investing Real estate finance and investing Risk SME, Family and Entrepreneurial Finance

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