Judicial independence and entrepreneurship - A quasi-natural experiment based on the judicial delocalization reform

The study explores the relationship between independent judiciary and entrepreneurship. Using a staggered adoption methodology with 2820 city-year observations spanning from 2010 to 2019, we have found a significant positive effect of the judicial independence to entrepreneurial activity thus leads to a substantial increase of entrepreneurs. Furthermore, we explore the potential mechanisms that judicial delocalization reform assists the cities in attracting highly educated entrepreneurs. Last, the positive link between judicial delocalization reform and entrepreneurship is notably weaker in the cities characterized by a strong clan culture, suggesting that clans and formal institutions may serve complementary roles.