This paper examines the impact of judicial independence on stock price crash risk. Employing the establishment of circuit tribunals in China as a shock to judicial independence and a difference-in-differences design, I find that increased judicial independence is associated with lower stock price crash risk. Further analysis suggests that timely disclosure of bad news is a potential mechanism through which judicial independence affects stock price crash risk. Cross-sectional tests indicate that the negative relationship between judicial independence and crash risk is more pronounced for firms located in areas with higher levels of local protectionism, firms with a stronger incentive to hoard more bad news, and firms with weaker external monitoring prior to the circuit tribunal implementation. Taken together, my findings suggest that judicial independence plays a disciplinary role in mitigating firms' bad-news-hoarding activities. 

Judicial independence and crash risk: Evidence from a natural experiment in China

Abstract Limited research has focused on the influence of judge independence on firms' corporate social responsibility (CSR), despite extensive literature examining the impact of the legal environment on CSR. To address this gap, we analyze the staggered adoption of judicial delocalization reform in China. This reform aimed to enhance local judges' independence and our analysis shows that firms have exhibited higher CSR scores since its implementation. Our channel analysis reveals an increase in lawsuits and monetary claims against firms due to the reform, indicating that firms engage in CSR activities to mitigate the negative effects of legal proceedings. The impact of the reform on CSR is stronger for high-litigation-risk firms and weaker for politically connected firms. Moreover, the positive relationship between the reform and CSR is more pronounced in regions with higher levels of government interference with judges before the reform. In summary, our findings highlight the important role of a supportive legal environment in fostering CSR, emphasizing the influence of judge independence. 

pdf/the-independence-of-judges-and-corporate-social-49iqixan6p.pdf

The Independence of Judges and Corporate Social Responsibility

A growing stream of research conducted in developed economies has shown that trademarks are positively related to firms' market value. However, we have limited understanding of whether this finding might apply to emerging economies, many of which have developed their own unique trademark regimes and are currently experiencing exponential growth in trademark registrations. In this study, we address this gap by constructing a new dataset that links trademark registrations with listed firms in China—the first of its kind for Chinese trademarks. Using this dataset, we find that in-use trademarks (trademarks being used by firms), as well as unused trademarks registered for a firm's current businesses, are positively related to firm value; further, the strength of IPR protection in subnational regions (provinces in China) amplifies these relationships. By contrast, unused trademarks that are not registered for a firm's current businesses have no impact on firm value. We also find that trademarks and patents complement each other in enhancing firm value. We call for more future research attention to trademarks in emerging economies to improve existing understanding of the important role trademarks play in these fast-growing markets often featuring unique IPR regimes. 

Trademarks and firm market value: Evidence from new trademark-firm linked data in China

ABSTRACT Research Question This study investigates whether and how executives with legal expertise impact corporate innovation. Research Findings Using a sample of listed firms in China, we have the following findings: (1) Firms that hire executives with legal expertise are associated with more corporate innovation. (2) These firms talk about potential legal risks and legal advisors more often in their annual reports and have lower chances of being sued in patent litigations. (3) The innovation‐promoting effect is stronger when the firms are state‐owned enterprises, have more overseas revenue, operate in high‐tech industries, have prior patent litigation experience, and are in strong legal environments. Theoretical/Academic Implications The findings indicate that executives with legal expertise bring more attention to legal risks and help the firm to shape a stable environment, which can effectively promote innovation activities. Also, the innovation‐promoting effect of lawyer executives complements the role of in‐house legal counsels and the external legal environment. This paper adds to the literature on the value of executives with legal background. Practitioner/Policy Implications Our results emphasize the important role played by executives with legal expertise in corporate innovation. Given the continuing shortage of legal talents and the gradual improvement of the legal system in China, firms need to employ more legal talents to avoid potential legal risks and maintain sustainable growth. 

Executives' Legal Expertise and Corporate Innovation

Efficient, affordable, and uncomplicated justice poses a complex dilemma within the Indonesian judicial system. However, applying technological advancements to assessing legal regulations can resolve this issue. This research aims to examine the necessity and implementation of digitalization in the Constitutional Court's judicial review process. This research utilized a normative legal approach, characterized by its prescriptive and applied nature, to examine the development and implementation of digitalization in the justice systems of the European Union, the United States, and the United Kingdom through comparative studies. The research results show that: first, technology in the Constitutional Court's judicial review process can most effectively promote openness and clarity in the decision-making procedure. However, there remain several areas in which the Constitutional Court must further refine itself to attain digital status, as inconsistencies persist in its practical rulings. Consequently, the Constitutional Court must increase the rate of digital transformation in its judicial review operations. Second, numerous other nations, including the European Union, the United Kingdom, and the United States, have observed the implementation of technological advancements, leading to enhanced transparency and accessibility in their justice systems. Thirdly, to overcome the challenges above, we must apply the fundamental principles of good judicial governance, procedural law at the Constitutional Court, the paperless principle, and the contactless service principle when developing digital transformation for future judicial review at the Court. This will enable us to achieve transparency and accessibility in the Constitutional Court's judicial system. 

pdf/digitalization-of-legal-transformation-on-judicial-review-in-3kgaqu1uzd.pdf

Digitalization of Legal Transformation on Judicial Review in the Constitutional Court

Judicial independence and corporate innovation: Evidence from the establishment of circuit courts

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Judicial independence and corporate innovation: Evidence from the establishment of circuit courts