IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v84y2025ics1544612325010578.html

Can the improvement of judicial quality optimize the business environment in the region? A study based on the moderating effect of financial technology development

Author

Listed:
  • Sun, Cong
  • Zeng, Fangyu

Abstract

Based on panel data from 31 provinces in China between 2007 and 2023, this study explores the impact of judicial quality improvement on the regional business environment and analyzes the moderating effect of fintech development in this relationship. The results indicate that enhancing judicial quality significantly promotes the optimization of the regional business environment. Moreover, the effect of judicial quality improvement on the business environment varies significantly between high and low openness regions. Additionally, fintech development plays a notable moderating role in the relationship between judicial quality and the regional business environment, with evident heterogeneity across different regions.

Suggested Citation

  • Sun, Cong & Zeng, Fangyu, 2025. "Can the improvement of judicial quality optimize the business environment in the region? A study based on the moderating effect of financial technology development," Finance Research Letters, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finlet:v:84:y:2025:i:c:s1544612325010578
    DOI: 10.1016/j.frl.2025.107799
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325010578
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.107799?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Lian, Yonghui & Ye, Tao & Zhang, Yiyang & Zhang, Lin, 2023. "How does corporate ESG performance affect bond credit spreads: Empirical evidence from China," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 352-371.
    2. Zhang, Dongyang & Bai, Dingchuan & Wang, Cao & He, Yurun, 2024. "Distribution dynamics and quantile dynamic convergence of the digital economy: Prefecture-level evidence in China," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    3. Zhang, Peng & Li, Zeyun & Ghardallou, Wafa & Xin, Yan & Cao, Jie, 2023. "Nexus of institutional quality and technological innovation on renewable energy development: Moderating role of green finance," Renewable Energy, Elsevier, vol. 214(C), pages 233-241.
    4. Lai, Shaojie & Yang, Laifeng & Wang, Qing & Anderson, Hamish D., 2023. "Judicial independence and corporate innovation: Evidence from the establishment of circuit courts," Journal of Corporate Finance, Elsevier, vol. 80(C).
    5. Liu, Menghe & Li, Yuxiao, 2022. "Environmental regulation and green innovation: Evidence from China's carbon emissions trading policy," Finance Research Letters, Elsevier, vol. 48(C).
    6. Ahmed Mohamed Habib, 2024. "Financial Development and Corporate Governance Efficiency: An Overview of MENA," World Scientific Book Chapters, in: Khaled Hussainey & Tamanna Dalwai (ed.), Handbook of Banking and Finance in the MENA Region, chapter 6, pages 147-169, World Scientific Publishing Co. Pte. Ltd..
    7. Luo, Yonggen & Cui, Huijie & Zhong, Huiyi & Wei, Changhua, 2023. "Business environment and enterprise digital transformation," Finance Research Letters, Elsevier, vol. 57(C).
    8. Ricardo Francisco Reier Forradellas & Luis Miguel Garay Gallastegui, 2021. "Digital Transformation and Artificial Intelligence Applied to Business: Legal Regulations, Economic Impact and Perspective," Laws, MDPI, vol. 10(3), pages 1-22, August.
    9. Li, Yuchen & Jin, Guangyi & Cui, Zhehao & Lv, Bishun & Xu, Zhejun, 2024. "Does digital inclusive finance promote regional green inclusive growth?," Finance Research Letters, Elsevier, vol. 62(PB).
    10. Ren, Siyu & Hao, Yu & Wu, Haitao, 2022. "The role of outward foreign direct investment (OFDI) on green total factor energy efficiency: Does institutional quality matters? Evidence from China," Resources Policy, Elsevier, vol. 76(C).
    11. He, Feng & Du, Hanyu & Yu, Bo, 2022. "Corporate ESG performance and manager misconduct: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 82(C).
    12. Zhouzhou Lin & Dezhi Liang & Shengnan Li, 2022. "Environmental Regulation and Green Technology Innovation: Evidence from China’s Heavily Polluting Companies," Sustainability, MDPI, vol. 14(19), pages 1-18, September.
    13. Zhi-Chao Wang & Chang-Qi Tao & Ye Xu, 2025. "Can higher marketization improve the level of entrepreneurship? - Evidence from China's negative list for market access," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-25, December.
    14. Olga Lavrinenko & Edmunds Čižo & Svetlana Ignatjeva & Alina Danileviča & Krzysztof Krukowski, 2023. "Financial Technology (FinTech) as a Financial Development Factor in the EU Countries," Economies, MDPI, vol. 11(2), pages 1-20, February.
    15. Lai, Jinming & Ke, Jinjun & Lin, Shuping & Zhang, Pengdong & Zhang, Qihao, 2024. "Business environment optimization and labor income share of enterprises: Evidence from China," Research in International Business and Finance, Elsevier, vol. 71(C).
    16. Wang, Kai & Li, Tingting & San, Ziyao & Gao, Hao, 2023. "How does corporate ESG performance affect stock liquidity? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    17. Chenggang Wang & Tiansen Liu & Yue Zhu & Meng Lin & Wenhao Chang & Xinyu Wang & Dongrong Li & He Wang & Jinsol Yoo, 2022. "Digital Economy, Environmental Regulation and Corporate Green Technology Innovation: Evidence from China," IJERPH, MDPI, vol. 19(21), pages 1-18, October.
    18. Zhou, Mengling & Li, Kexin & Chen, Zhongfei, 2021. "Corporate governance quality and financial leverage: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 73(C).
    19. Li, Quan & Li, Tianshu & Zhang, Yuan, 2024. "ESG performance, heterogeneous creditors, and bond financing costs: Firm-level evidence," Finance Research Letters, Elsevier, vol. 66(C).
    20. Siyu Ren & Yu Hao & Haitao Wu, 2022. "How Does Green Investment Affect Environmental Pollution? Evidence from China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(1), pages 25-51, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. He, Yan & Lin, Chen, 2025. "Dynamic impact of media coverage on corporate risk management: Moderating effect of environmental policies and heterogeneity analysis," International Review of Economics & Finance, Elsevier, vol. 100(C).
    2. Huang, Lilong & Zhuang, Yikun & Dong, Dongdong & Dong, Xueqin, 2025. "Strengthening of financial regulation and financial enterprise risk-taking: Analysis based on threshold effects, subindustry heterogeneity, and the moderating role of firm size," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    3. Sun, Yuliang & Han, Mingfeng, 2025. "Does globalized R&D promote corporate innovation?," Finance Research Letters, Elsevier, vol. 81(C).
    4. Li, Zongmin, 2025. "Employee stock ownership, agency costs and corporate financial information quality," Finance Research Letters, Elsevier, vol. 85(PD).
    5. Gong, Zhongyi & He, Pei & Sun, Yuyang, 2025. "Social governance, financial regulation, and corporate investment efficiency," Finance Research Letters, Elsevier, vol. 79(C).
    6. Li, Yilong & Huang, Yongjian & Sheng, Jie, 2025. "Policy-driven energy transition: China's low-carbon journey and global implications," Energy Economics, Elsevier, vol. 150(C).
    7. Ma, Cuijun & Peng, Donghui, 2025. "Government subsidies, environmental costs, and green innovation," International Review of Economics & Finance, Elsevier, vol. 101(C).
    8. Liu, Yang & Zhang, Jintao & Zhu, Le, 2025. "Pay for air pollution: Ecological compensation policy and corporate investment," International Review of Financial Analysis, Elsevier, vol. 97(C).
    9. Wang, Lan & Ding, Xinge & Yang, Yudong & Wu, Ruiyi, 2025. "Corporate environmental performance and bond financing cost: A multi-stakeholder signaling perspective," International Review of Financial Analysis, Elsevier, vol. 106(C).
    10. Wang, Junwei & Xing, Yafei & Xiao, Daibo, 2025. "An empirical study on the relationship between executives' financial background and corporate ESG performance," International Review of Financial Analysis, Elsevier, vol. 102(C).
    11. Hu, Feifei & Chang, Huibin & Wang, Dongxue & Chen, Xiaowei, 2025. "Fostering green technological innovation through carbon emission trading policies," Finance Research Letters, Elsevier, vol. 74(C).
    12. Zhang, Jintao & Lei, Xinghui & Su, Taoyong & Li, Ziyao, 2025. "Credit availability of energy-intensive industries in emerging economies: Do financially established firms have better access to credit?," Energy Economics, Elsevier, vol. 145(C).
    13. Gao, Jie & Hu, Wenxiu, 2025. "Investor attention, corporate technology investment, and green innovation," Finance Research Letters, Elsevier, vol. 85(PA).
    14. Li, Donghui & Zhang, Zhanxiang & Gao, Xin, 2025. "The impact of carbon emission trading system on the implied cost of equity capital," International Review of Economics & Finance, Elsevier, vol. 101(C).
    15. Wang, Dongjing & Yong, Chen & Wang, David (Han) & Tian, Grace (Li), 2025. "Synergistic effects and mechanisms of green financial reform, environmental regulation intensity, and regional green innovation levels," International Review of Economics & Finance, Elsevier, vol. 102(C).
    16. Yan, Xintong & Xiao, Daibo & Chan, Hokai & Zeng, Guoxiong & Wei, Renxing, 2025. "Impact of high-speed rail operation, ESG performance, and financial performance of listed tourism companies," Finance Research Letters, Elsevier, vol. 77(C).
    17. Xu, Zhiyi & Yang, Jindi, 2025. "Impact of digital finance on rural industry revitalization," International Review of Economics & Finance, Elsevier, vol. 97(C).
    18. Zhang, Dongyang & Bai, Dingchuan & He, Yurun & Sun, Qiaobing, 2024. "Synergistic abatement effects of Broadband China and environmental regulation: Firm-level evidence," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    19. Tang, Xinhui & Du, Shujun & Deng, Wenwen, 2025. "Business innovation in digital startups: A case study of an AI startup," International Review of Economics & Finance, Elsevier, vol. 98(C).
    20. Wang, Muyun & Zhang, Ying, 2024. "Controlling shareholders' equity pledge, litigation risk and corporate ESG performance," International Review of Economics & Finance, Elsevier, vol. 95(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:84:y:2025:i:c:s1544612325010578. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.