A paper co-authored by Professor Yu Minggui from the School of Finance at Zhongnan University of Economics and Law, titled Bankruptcy Judicial Reform and Employment Stabilization: Evidence from the Pilot Reform of Enterprise Bankruptcy Trial Procedures, has been published in Issue 4, 2025 of Journal of Quantitative & Technological Economics. This journal is recognized as a Category A (A-) journal in economics by Zhongnan University of Economics and Law.

Abstract​​

The report of the 20th National Congress of the Communist Party of China emphasizes that employment is the most fundamental aspect of people's livelihoods. This paper examines the impact of bankruptcy judicial reform on corporate employment decisions, using the 2014 Supreme People's Court's pilot reform of enterprise bankruptcy trial procedures as a quasi-natural experiment. The study finds that the bankruptcy judicial reform significantly increased corporate labor demand—firms in pilot regions experienced an average 7.1% rise in employment scale compared to non-pilot regions. Mechanism analysis reveals that heightened risks of control transfer serve as the primary channel through which the reform promotes employment. Specifically, the threat of dominant creditors seizing control incentivizes firms to shift input allocation from capital to labor. Additionally, due to creditors' oversight, the reform does not significantly affect corporate wage expenditures but instead drives firms to expand employment scale rather than upgrade human capital. This study extends research on the economic consequences of China’s bankruptcy judicial reforms and provides policy insights for employment stabilization from the perspective of legal system development.

​​Keywords:​​ Bankruptcy judiciary; Labor employment; Creditors

Author Profiles​

Professor Yu Minggui​​, Dean and Full Professor (Second Class) at the School of Finance, Zhongnan University of Economics and Law, Ph.D. supervisor, Lead Expert of Major Projects under the National Social Science Fund, and recipient of the New Century Excellent Talents award from the Ministry of Education. Research fields: digital finance, finance and artificial intelligence, corporate finance, and finance and innovation. Has published over 90 academic papers in authoritative domestic and international journals including Economic Research Journal, Management World, The World Economy, China Economic Quarterly, Journal of Financial Research, China Industrial Economics, Accounting and Finance, Pacific-Basin Finance Journal, and Economic Modelling. Has presided over more than 10 major research projects including Major Projects of the National Social Science Fund, Key Projects of the National Social Science Fund, and projects of the National Natural Science Foundation of China.

Ma Lin​:Ph.D. Candidate, Department of Finance, The Chinese University of Hong Kong

​​Qiang Haofan​:Ph.D. Candidate, School of Economics, Fudan University