Legal unification, financial regulatory intensity, and the enhancement of economic performance in the Greater Bay Area

Based on data from listed companies in the Greater Bay Area from 2011 to 2023, this paper extensively explores the relationship and underlying mechanisms among legal unification, the intensity of financial regulation, and economic performance in the Greater Bay Area. The study demonstrates a significant positive correlation between legal unification and the region's economic performance, indicating that as the legal system becomes more coordinated and unified, the economic performance of the Greater Bay Area improves substantially. However, this relationship exhibits notable heterogeneity across firms of different sizes, with large enterprises benefiting more from legal unification, while small enterprises experience a lesser impact. Further analysis reveals that the intensity of financial regulation plays a significant moderating role between legal unification and economic performance. Specifically, in large enterprises, stronger financial regulation further enhances the positive effect of legal unification on economic performance, whereas in small enterprises, this moderating effect is relatively limited. The study also finds that legal unification indirectly boosts economic performance by promoting greater market integration, suggesting that market integration is a crucial pathway through which legal unification enhances economic outcomes. Overall, this research highlights the pivotal roles of legal unification and financial regulation in driving the high-quality economic development of the Greater Bay Area and offers empirical evidence to inform policymakers in optimizing regional legal frameworks and financial regulatory policies.