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Justice Reform and Entrepreneurship: Evidence from China

Author

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  • Wu, Ziqi
  • Xiao, Yi
  • Zhang, Jian
  • Wu, Jingyi

Abstract

This paper aims to analyze the impact of justice reform on entrepreneurship in China, utilizing a staggered difference-in-differences model. The research reveals that the implementation of justice reform has a sizable positive effect on entrepreneurship, both statistically and economically significant. The influence is more pronounced in areas with higher trust, lower legal environment, and in rural areas. Government quality and innovation are two possible mechanisms. This paper emphasizes the significant role of the justice environment in fostering business innovation and entrepreneurship, and highlights the economic significance of government quality, providing a new perspective for encouraging entrepreneurship.

Suggested Citation

  • Wu, Ziqi & Xiao, Yi & Zhang, Jian & Wu, Jingyi, 2024. "Justice Reform and Entrepreneurship: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1190-1203.
    • Handle: RePEc:eee:ecanpo:v:82:y:2024:i:c:p:1190-1203
    DOI: 10.1016/j.eap.2024.05.003
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    References listed on IDEAS

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    1. Qiu, Lu & Yuan, Peng & Wei, Shuni & Xu, Kefan, 2026. "Does entry deregulation foster entrepreneurship? Evidence from China’s unified market access reform," Economic Analysis and Policy, Elsevier, vol. 89(C), pages 834-859.
    2. Liu, Huilong & Wang, Yifei & Xie, Jing & Yin, Jun, 2026. "Judicial independence and firms’ labor share: Evidence from a quasi-natural experiment in China," Journal of Asian Economics, Elsevier, vol. 102(C).

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