IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v198y2025i3d10.1007_s10551-024-05780-2.html
   My bibliography  Save this article

Judicial Waves, Ethical Shifts: Bankruptcy Courts and Corporate ESG Performance

Author

Listed:
  • Zixun Zhou

    (Macau University of Science and Technology)

  • Xinyu Zhou

    (Peking University)

  • Xuezhi Zhang

    (Sun Yat-Sen University)

  • Wei Chen

    (Sun Yat-Sen University)

Abstract

Leveraging the staggered introduction of specialized bankruptcy courts across China as an exogenous shock, this study examines the impact of specialized bankruptcy courts on corporate ESG performance. Using listed firms in China from 2015 to 2021, we find that the introduction of specialized bankruptcy courts leads to an increase in corporate ESG performance. Our main results remain robust after considering endogeneity concerns and TWFE bias. The underlying mechanism is that these courts strengthen creditor protection, thereby enhancing access to bank loans for local firms. Moreover, this effect is more pronounced in firms with limited access to bank financing and in cities with more efficient legal and financial environments. Collectively, our study contributes a novel perspective to the discourse in law and finance, underscoring the broader implications of judicial reforms on corporate ethical behavior.

Suggested Citation

  • Zixun Zhou & Xinyu Zhou & Xuezhi Zhang & Wei Chen, 2025. "Judicial Waves, Ethical Shifts: Bankruptcy Courts and Corporate ESG Performance," Journal of Business Ethics, Springer, vol. 198(3), pages 537-557, May.
    • Handle: RePEc:kap:jbuset:v:198:y:2025:i:3:d:10.1007_s10551-024-05780-2
    DOI: 10.1007/s10551-024-05780-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-024-05780-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-024-05780-2?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 search for a different version of it.

    More about this item

    Keywords

    ESG; Bankruptcy courts; Legal environment; Bank loans;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    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:kap:jbuset:v:198:y:2025:i:3:d:10.1007_s10551-024-05780-2. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.