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Judicial efficiency, carbon emission trading regulation, and regional financial risk

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  • Xu, Wanshu
  • Wang, Haoyu

Abstract

Based on the data of 30 provinces in China from 2012 to 2023, this paper takes the pilot of judicial system reform and carbon emission trading regulation as a quasi-natural experiment, empirically examines the impact of judicial efficiency, carbon emission trading regulation and their synergy on regional financial risks. The results show that judicial efficiency alleviates regional financial risks; short-term carbon regulation increases them; the “dual pilot” synergy suppresses risks significantly. In addition, digital finance plays a partial intermediary role, and judicial efficiency and their synergy can further alleviate regional financial risks by enhancing the level of digital finance. Heterogeneity analysis finds the strongest synergy in eastern China, while central-western effects are insignificant due to poor basic conditions.

Suggested Citation

  • Xu, Wanshu & Wang, Haoyu, 2026. "Judicial efficiency, carbon emission trading regulation, and regional financial risk," Finance Research Letters, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:finlet:v:90:y:2026:i:c:s1544612325025280
    DOI: 10.1016/j.frl.2025.109279
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    References listed on IDEAS

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