Yongwei Ye , Dongmin Kong , Renzhi Li , Xiaofan Li , Yunqing Tao
{"title":"Online judicial auction, loan availability, and corporate investment in China","authors":"Yongwei Ye , Dongmin Kong , Renzhi Li , Xiaofan Li , Yunqing Tao","doi":"10.1016/j.bar.2024.101487","DOIUrl":null,"url":null,"abstract":"<div><div>Online judicial auctions can significantly impact corporate investment by enhancing creditor protection and facilitating loan availability. Using a dynamic difference-in-differences strategy, we find that the reform significantly boosts corporate investment. Mechanism tests reveal that the reform boosts corporate investment by improving corporate loan availability and creditors' willingness to lend. The effect is more pronounced in regions with high judicial auction turnover, high public participation, poorer legal environments, and lower banking competition, suggesting that these reforms enhance legal system efficiency and market competition. Additionally, we find that judicial auction reform reduces firms’ precautionary savings and fosters regional economic development. Overall, our study contributes to understanding the important role of creditor protection in corporate investment and provides insights for implementing digital judicial reforms.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101487"},"PeriodicalIF":5.5000,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"British Accounting Review","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0890838924002646","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Online judicial auctions can significantly impact corporate investment by enhancing creditor protection and facilitating loan availability. Using a dynamic difference-in-differences strategy, we find that the reform significantly boosts corporate investment. Mechanism tests reveal that the reform boosts corporate investment by improving corporate loan availability and creditors' willingness to lend. The effect is more pronounced in regions with high judicial auction turnover, high public participation, poorer legal environments, and lower banking competition, suggesting that these reforms enhance legal system efficiency and market competition. Additionally, we find that judicial auction reform reduces firms’ precautionary savings and fosters regional economic development. Overall, our study contributes to understanding the important role of creditor protection in corporate investment and provides insights for implementing digital judicial reforms.
期刊介绍：
The British Accounting Review*is pleased to publish original scholarly papers across the whole spectrum of accounting and finance. The journal is eclectic and pluralistic and contributions are welcomed across a wide range of research methodologies (e.g. analytical, archival, experimental, survey and qualitative case methods) and topics (e.g. financial accounting, management accounting, finance and financial management, auditing, public sector accounting, social and environmental accounting; accounting education and accounting history), evidence from UK and non-UK sources are equally acceptable.
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