Financial risk under differences in legal efficiency: An analysis of the moderating effect of judicial transparency

• Law efficiency significantly reduces financial risks. • Judicial transparency moderates the link between law efficiency and financial risks. • The impact of law efficiency on financial risks varies by population density. • The impact of law efficiency on financial risks varies by social consumption. With the rapid development of China's financial system and the intensification of regional disparities, the prevention and control of financial risks is facing new institutional challenges. Based on provincial panel data from China spanning 2011 to 2023, this paper empirically examines the impact of rule of law efficiency on financial risks and introduces judicial transparency to explore its moderating role in the relationship between rule of law efficiency and financial risks. The study finds that rule of law efficiency has a significant negative effect on financial risks. In addition, judicial transparency not only helps to reduce financial risks, but also plays a moderating role in the relationship between rule of law efficiency and financial risks. Heterogeneity analysis shows that the negative effect of rule of law efficiency on financial risks is more pronounced in regions with low population density and low levels of social consumption. This paper provides empirical evidence and policy implications for improving regional financial governance systems and the construction of the rule of law environment.

Authors

Publication Details

Journal
Finance research letters
Published
2025-09-23
DOI
https://doi.org/10.1016/j.frl.2025.108480
Primary Topic
Law, Economics, and Judicial Systems
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Financial risk under differences in legal efficiency: An analysis of the moderating effect of judicial transparency

Li Li, Bin Li
Finance research letters
Law, Economics, and Judicial Systems
article

Financial risk under differences in legal efficiency: An analysis of the moderating effect of judicial transparency

Li Li, Bin Li
article en

Abstract

• Law efficiency significantly reduces financial risks. • Judicial transparency moderates the link between law efficiency and financial risks. • The impact of law efficiency on financial risks varies by population density. • The impact of law efficiency on financial risks varies by social consumption. With the rapid development of China's financial system and the intensification of regional disparities, the prevention and control of financial risks is facing new institutional challenges. Based on provincial panel data from China spanning 2011 to 2023, this paper empirically examines the impact of rule of law efficiency on financial risks and introduces judicial transparency to explore its moderating role in the relationship between rule of law efficiency and financial risks. The study finds that rule of law efficiency has a significant negative effect on financial risks. In addition, judicial transparency not only helps to reduce financial risks, but also plays a moderating role in the relationship between rule of law efficiency and financial risks. Heterogeneity analysis shows that the negative effect of rule of law efficiency on financial risks is more pronounced in regions with low population density and low levels of social consumption. This paper provides empirical evidence and policy implications for improving regional financial governance systems and the construction of the rule of law environment.

Finance research lettersVol. 86
Openalex Percentile: Top 66%
Law, Economics, and Judicial Systems
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.