Recently, the paper titled “Suing the leviathan: The effect of trans-regional jurisdiction reform on corporate investment”, co-authored by Associate Professor JIAO Yinyi from the School of Public Finance and Taxation, Dongbei University of Finance and Economics, GENG Jiayi of Xiamen University, Jinjun (Ricky) KE of the University of Auckland, Meiting LU of Macquarie University, and Yaowen SHAN of the University of Technology Sydney, has been published online in the Journal of Development Economics.

The study examines how China’s Trans-Regional Jurisdiction reform affects corporate investment. The reform assigns administrative cases against local governments to courts outside the defendant government’s home jurisdiction, thereby limiting local government influence over judicial proceedings. Using a stacked difference-in-differences design that exploits the staggered rollout of the reform, the authors find that the reform significantly increases corporate investment by the equivalent of 28.7 percent of the sample mean. Further evidence shows greater use of administrative litigation and improved litigation outcomes for firms, alongside lower institutional transaction costs and reduced financing constraints. The findings provide new evidence on how greater judicial independence can shape firms’ investment decisions and real economic activity.

The Journal of Development Economics is widely recognized as one of the leading international journals in development economics. The publication of this paper represents another important research achievement for the School of Public Finance and Taxation and further underscores the School’s growing international research profile.

Written by: Li Jingyi

Source: School of Public Finance and Taxation