Local judicial system reform and corporate investment : evidence from unified management of local courts below the province

Using the policy of unified management of local courts below the province, we found that the independence of the judiciary can significantly improve the success rate of firms in administrative litigation cases, promoting the corporate fixed assets investment rate. The positive influence of reform of local judicial system on private firms is more significant than that on state-owned enterprises. Mechanism analysis shows that the reform of local judicial system will promote financial development and improve corporate financing, reduce corporate bribery expenditures and promote long-term investment and R&D expenditures, which indicates that deepening judicial system reform can achieve the simultaneous advancement of legal construction and economic construction.