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Justice as efficiency: Courts and the allocation of electricity in China

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  • Fu, Tong
  • He, Feng
  • Lucey, Brian

Abstract

This paper explores how the justice of courts affects the allocative efficiency of electricity. We argue that courts with the justice objective will guarantee the allocative efficiency of electricity. With micro-evidence from China, we measure the allocative efficiency of electricity by the elasticity of the reliability of electricity on value added per employee in regression. We then verify that justice in courts positively moderates the elasticity of interest with robustness to the potential endogeneity bias and that corruption as a proxy for injustice has a negative moderation effect. Therefore, we document that the quality of courts determines the allocative efficiency of electricity, thereby enhancing the understanding of economic institutions for sustainable development.

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  • Fu, Tong & He, Feng & Lucey, Brian, 2023. "Justice as efficiency: Courts and the allocation of electricity in China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:intfin:v:84:y:2023:i:c:s1042443123000148
    DOI: 10.1016/j.intfin.2023.101746
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    More about this item

    Keywords

    Justice; Courts; Allocative efficiency; Electricity;
    All these keywords.

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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