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Innovation in external supervision systems, business environment, and corporate financialization: a quasi-natural experiment based on the pilot program of prosecutorial administrative public interest litigation system

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  • Lou, Chao
  • Xie, Shaojing

Abstract

This study examines a quasi-natural experiment of the pilot implementation of the prosecutorial administrative public interest litigation system in China from 2015 to 2017. It analyzes data from publicly listed companies (2008–2017) using a difference-in-differences method to assess how external supervision system innovations and the business environment affect corporate financialization. The findings indicate that such innovations directly enhance corporate financialization and, through improved business conditions, indirectly stimulate it. The impact shows regional variation, particularly influencing private and small to medium-sized enterprises.

Suggested Citation

  • Lou, Chao & Xie, Shaojing, 2025. "Innovation in external supervision systems, business environment, and corporate financialization: a quasi-natural experiment based on the pilot program of prosecutorial administrative public interest litigation system," Finance Research Letters, Elsevier, vol. 86(PA).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pa:s1544612325016423
    DOI: 10.1016/j.frl.2025.108388
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    References listed on IDEAS

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