Do Checks on Bureaucrats Improve Firm Value? Evidence from a Natural Experiment

An, Jiafu; Armitage, Seth; Hou, Wenxuan; Liu, Xianda

doi:10.2139/ssrn.3672876

Cited by 1 publication

(1 citation statement)

References 33 publications

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“…This is conducive to achieving highquality economic development [35]. Furthermore, strengthening constraints on bureaucratic behavior can enhance the market value of enterprises [65], fostering long-term economic growth. Thus, judicial independence holds not only significant constitutional implications but also substantial economic value.…”

Section: Plos Onementioning

confidence: 99%

Judicial improvement, market integration, and export technical complexity-a quasi-natural experiments based on the creation of circuit courts

Gao,

Kong

2024

PLoS ONE

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Judicial improvement and trade structure optimization are important elements in achieving a high level of openness. This paper develops a theoretical framework on the impact of local protectionism on market integration and export technical complexity, and then empirically analyses the effect of judicial improvement on the technical complexity of urban product exports and its mechanism of action based on a quasi-natural experiment with the establishment of circuit courts. The study finds that the establishment of circuit courts significantly increases the technical complexity of product exports, and the findings remain valid after a series of robustness tests. Further analysis shows that the technology enhancement effect of the establishment of circuit courts is more pronounced in the group of cities with higher administrative levels, better location advantages, and less advanced rule of law. Mechanism Analysis shows that a superior institutional environment can have a two-sided effect on different types of firms. Overall, however, the productivity-enhancing effect of low-productivity firms exiting the market is lower than the productivity-reducing effect of higher-productivity firms’ increased compliance costs, which in turn weakens the positive promotional effect of circuit courts. The above theoretical and empirical findings provide policy implications for maximizing the technology enhancement effect of the establishment of circuit courts on product exports, thereby promoting a high level of openness in China.

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Section: Plos Onementioning

confidence: 99%