Judicial Efficiency and Corporate Innovation: Moderating Role of Governance
Abstract
This research examined that how well the judicial system works and its effect corporate innovation which measured through investments in research and development activities (R&D). The study also tests the moderating role governance in this relationship. The study used judicial data acquired from the World Bank’s Doing Business database for the sample period from 2008 to 2019 whereas other variable data collected from the companies published reports. Correlation and Panel data analysis were employed for the analysis purpose. The regression results show that there exists a positive and significant effect of the Judiciary efficiency on firm’s innovation. Moreover, the governance is also found to have a significant and positive moderating effect. These results support that efficient judicial systems boost corporate innovation by reducing uncertainties and creating a better environment for R&D. Additionally, strong governance further enhances the significant impact of judicial efficiency on corporate innovation, suggesting that good governance practice complement the judicial system in enhancing corporate innovation.
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