Does improving judicial process effectiveness relieve the maturity mismatch between corporate investment and financing? Evidence from a quasi-natural experiment

An efficient judicial process is a crucial foundation for optimizing the business environment and improving the efficiency of resource allocation. Using the urban judicial reform introducing “differentiated procedures for simple and complex cases” as a quasi-natural experiment, this study empirically investigates how enhanced judicial procedural efficiency affects the maturity mismatch between corporate investment and financing, and explores the underlying mechanisms. The findings show that greater judicial efficiency significantly mitigates firms’ investment–financing maturity mismatch. Mechanism analyses reveal that the reform primarily operates through two channels: lowering enterprises’ litigation costs and increasing their access to long-term credit. Heterogeneity analyses further indicate that the reform’s mitigating effects are more pronounced among non-state-owned enterprises, large-scale firms, firms with higher asset specificity, and in regions characterized by a stronger rule of law. Additional analyses demonstrate that the combined implementation of judicial reform with pilot programs on technology–finance integration and public data platform openness substantially amplifies the reform’s policy effects. This study clarifies the mechanisms through which improved judicial efficiency enhances the allocation of financial resources and provides important implications for deepening judicial reform and strengthening a rule-of-law-based business environment.