The Rule of Law Driven High-Quality Economic Development: Evidence from China

The Rule of Law Driven High-Quality Economic Development: Evidence from China | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article The Rule of Law Driven High-Quality Economic Development: Evidence from China Huicong Liang, Jianwen Li This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7550622/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study examines the role of the rule of law in fostering high-quality economic development in China, using data from 266 cities over the period 2003–2021. We construct a composite index of high-quality economic development through principal component analysis and capture the rule of law with a novel text-based index derived from annual government work reports using natural language processing. The findings reveal that stronger rule of law significantly promotes high-quality economic development, with the effects being particularly pronounced in core cities. Mechanism analysis shows that innovation serves as the primary channel, while entrepreneurship and net firm entry play negligible roles. These results underscore the critical role of the rule of law in advancing high-quality economic development and highlight the importance of strengthening legal institutions, especially in non-core cities, to achieve more balanced regional economic development. JEL Classification: Q10, O31, P37 Business and commerce/Economics Social science/Economics Social science/Social policy Rule of law High-quality economic development Innovation Entrepreneurship 1. Introduction High-quality economic development (HQED) can be measured through a variety of indicators that reflect a shift from traditional GDP-focused growth to a more comprehensive and sustainable approach. This approach is particularly relevant in countries like China, where the growth model is shifting from extensive, investment-driven expansion to more balanced, sustainable, and innovation-led development (Chen & Huo, 2022; Pan et al., 2021; Xu et al., 2025). Achieving high-quality economic development requires not only factor accumulation and industrial upgrading but also the presence of robust institutional frameworks that govern incentives, coordinate behavior, and shape the dissemination of information. Without such institutional underpinnings, productivity gains and structural transformation are unlikely to be sustained. Foundational theories in the new institutional economics stress that secure property rights and credible contract enforcement are essential for reducing transaction costs and sustaining long-term growth (North, 1990). Comparative evidence supports this view. Cross-country analyses, such as Porta et al. (1998), demonstrate that legal systems protecting investor rights foster capital market deepening and long-run development. Global governance indicators, including the World Bank’s Worldwide Governance Indicators and the World Justice Project’s Rule of Law Index, consistently show that countries with stronger legal institutions enjoy higher levels of innovation, lower corruption, and more effective industrial transformation. In China, the institutional context exhibits distinct complexities. Empirical research suggests an inverted U-shaped relationship between judicial development and regional economic growth (Zhang et al., 2025). Strengthening intellectual property rights, expanding specialized courts, and enforcing legal protections have begun to shift incentives toward innovation and higher-quality industrial activities (Yueh, 2009; Brander et al., 2017). Firms located in regions with stronger legal institutions exhibit higher levels of patenting and green innovation, as clearer regulatory signals reduce uncertainty and alter strategic behavior (Zhao & Zhao, 2025). Conversely, bureaucratic entry barriers and opaque legal processes remain major obstacles to entrepreneurship and resource reallocation (Klapper et al., 2006). Despite these insights, much of the existing evidence relies on national-level or provincial-level indicators. Such aggregate measures fail to capture the substantial institutional variation among China’s 300-plus prefecture-level cities, where governance quality, judicial capacity, and administrative transparency differ markedly. This gap motivates the central research question of this study, how, and to what extent, does the rule of law shape high-quality economic development at the city level? Government work reports, which are annual, legally mandated documents that outline policy goals and review implementation, offer a rich yet under-exploited source for gauging local rule-of-law discourse. Leveraging this untapped resource, our research constructs annual city-level indicators of the rule of law from 2003 to 2021 using natural language processing techniques. This allows us to capture temporal variation and regional heterogeneity that national indices often overlook. To measure outcomes, we draw on Zhao et al. (2020) and apply principal component analysis to generate a composite index of high-quality economic development. By linking these two measures, our analysis investigates whether and how enhanced rule-of-law environments support high-quality economic development. Our empirical analysis yields three key findings. First, strengthening the rule of law significantly promotes high-quality economic development, and the effect is both economically meaningful and statistically robust. The results hold when employing alternative measures of legal institutions, excluding potentially confounding cases, accounting for the national innovative city pilot program, and conducting further robustness checks such as lagged specifications and instrumental variable estimation. Second, the impact of the rule of law is heterogeneous. It is particularly pronounced in cities with higher strategic centrality, underscoring the spatial dimension of institutional effectiveness. Third, the mechanism analysis reveals that the rule of law primarily fosters high-quality development through innovation, while its direct effects on entrepreneurship and firm dynamics are comparatively limited. This study offers three primary contributions. First, it introduces a novel, document-based measure of the rule of law that captures temporal and policy nuance often missing from conventional indices. This approach complements existing measures and offers replicability for future governance studies. Second, by disaggregating the analysis to the city-year level for 266 Chinese cities over nearly two decades, we provide fine-grained empirical evidence on how local rule of law influences development outcomes in an emerging economy context. This city-level perspective helps uncover spatial heterogeneity and highlights the distinct challenges faced by core versus non-core cities. Third, by linking the rule of law to high-quality economic development, our findings extend the literature on law and development from a narrow focus on growth and investment to broader aspects of development quality. The results not only advance theoretical understanding but also offer actionable insights for policymakers seeking to foster regionally balanced, law-based governance reforms that sustain long-term economic upgrading. The remainder of this paper is organized as follows. Section 2 review the related literature. Section 3 introduces the data and the research methodology. Section 4 provides the summary statistics, baseline results, and robustness tests. Section 5 shows findings of heterogeneity analysis and mechanism analysis. Finally, Section 6 concludes the paper. 2. Literature Review 2.1 The framework for measuring high-quality economic development Measuring high-quality economic development requires moving beyond traditional metrics like economic growth rate to adopt a multi-dimensional framework (Chen & Huo, 2022). This is typically achieved by constructing a comprehensive evaluation index system based on key dimensions that reflect a holistic view of societal process. A consistent theme across numerous studies is the use of five dimensional framework based on the “new development concepts” to define and measure high-quality economic development. These five core dimensions are innovation, coordination, green development, openness, and sharing (Li et al., 2023). Some frameworks expand this to include other dimensions like economic quality, social civilization, and security to create an even more comprehensive picture (Chen et al., 2023). Innovation is considered the primary driving force of high-quality economic development, determining the speed and efficiency of development. Indicators for this dimension often focus on R&D inputs and outputs, such as R&D expenditure, patent applications per capita, and the number of scientific research institutions (Zhang et al., 2024a). Coordination addresses the need for balance between different regions, between urban and rural areas, between economic and social structures (He et al., 2025). This dimension is measured using indicators like GDP per capita, the tertiary-secondary industry coordination ratio, the ratio of urban-rural income (Zeng et al., 2023; Zeng et al., 2024). Green development emphasizes forming an industrial structure and lifestyle that conserves resources, protect the environment, and achieves harmony between humanity and nature (Chen & Huo, 2022; Li et al., 2025). It includes the intensity of pollution control, energy consumption per unit of GDP, carbon emissions, among others (He et al., 2025; Liu et al., 2024). Openness involves building a higher level of integration with the global economy, which facilitates learning, trade, and investment. This dimension is measured by indicators such as the degree of dependence on foreign trade, the foreign investment (Zeng et al., 2024). Sharing is rooted in the principle of being people-oriented. It ensures that all people participate in and benefit from development, progressing towards common prosperity. Measurement indicators of this dimension include public services, people’s living conditions, educational attainment, and among others (Zhao et al., 2020). 2.2 The quantitative methodologies for assessment of high-quality economic development The assessment of high-quality economic development relies on a variety of quantitative methodologies to transform complex, multidimensional data into coherent and interpretable results. Principal component analysis (PCA) is used to combine numerous economic development indicators into uncorrelated components, reducing issues of multicollinearity and differing magnitudes (Chen & Huo, 2022; Zhao et al., 2020). Entropy weight method is used to determine the weight of different economic indicators in a composite index, avoiding the subjectivity of expert-based weighting (Chen et al., 2023; Wen et al., 2024). Factor analysis, similar to PCA, is employed to identify the underlying dimensions of high-quality economic development from a large set of indicators and to estimate the overall economic development level (Li et al., 2023). Machine learning models, such as K-means clustering, are used to classify regions into distinct development types, revealing spatial patterns and disparities (Pang & Nie, 2025; Wang, 2024). 2.3 The key factors driving high-quality economic development The specific characteristics that drive high-quality economic development are multifaceted and interconnected, moving beyond simple economic growth to a comprehensive emphasis on its quality, sustainability, and inclusiveness. A growing body of empirical research highlights a wide spectrum of drivers underpinning high-quality economic growth. Foreign direct investment facilitates technology spillovers and thereby reinforces long-term development (Zhang et al., 2024b). Structural upgrading through improvements in industrial composition, infrastructure, and digital finance not only boosts productivity but also delivers co-benefits in environmental performance (Bai et al., 2012; Chen & Huo, 2022). Urbanization generates agglomeration economies that accelerate growth trajectories (Li, 2017), while fiscal decentralization enhances the quality and sustainability of development (Li & Gu, 2025). Beyond these macro-level factors, recent studies reveal several new drivers. Technological innovation remains a core source of productivity growth (Gang & Zhao, 2025; Zhang et al., 2024c). National industrial transfer demonstration zones also play an important role (Zhang & He, 2025). The clustering of manufacturing and high-tech industries strengthens regional competitiveness (Guo & Sun, 2023; Huang et al., 2025). Environmental regulation provides a disciplining force that supports sustainability (Du, 2023). Digital financial inclusion expands access to resources and improves efficiency (Ding & Kang, 2024). Urban investment bonds increase local fiscal capacity and strengthen infrastructure financing (Zhang & Su, 2025). Education enhances human capital and serves as a long-term foundation for innovation-driven growth (Yu & Liu, 2025). In sum, the literature has substantially advanced our understanding of the multifaceted drivers of high-quality economic development. Prior work highlights the importance of industrial upgrading, financial deepening, technological innovation, and human capital accumulation. Nevertheless, although economic and structural factors have been extensively examined, the rule of law which is widely regarded as a cornerstone of the institutional environment remains underexplored at the city level. Addressing this gap forms the basis of the present study. 3. Data and methodology 3.1 Data This study uses city-level data sourced from the municipal government work reports, the Chinese Research Data Services Platform (CNRDS), and the China Urban Statistical Yearbook for the period 2003–2021. To mitigate outliers, we winsorize all continuous variables at the 1st and 99th percentiles (i.e., replacing observations below the 1st percentile and above the 99th percentile with the respective threshold values). After dropping observations with missing values on the key variables, we retain 4438 city-year observations for 266 cities during 2003–2021. Specifically, we follow Zhao et al. (2020) to derive five second‑level indicators, industrial structure, total factor productivity (TFP), technological innovation, ecological environment, and residents’ living standards, to capture the multidimensional concept of high‑quality economic development (HQED), as detailed in Table 1 . We apply Principal Component Analysis to construct a composite HQED index. We retain the first four principal components (eigenvalues > 1, Kaiser criterion). Together, the four retained components explain 77.53% of the total variance, and the components are weighted by their explained variance to form the composite HQED index. Table 1 Evaluation system for HQED index Primary index Secondary index Tertiary index Index attribute High-quality economic development index Industrial structure Advancement of industrial structure + Rationalization of industrial structure - Proportion of productive service industries + TFP Total factor productivity + Technological innovation Innovation index + Ecological environment Industrial sulfur dioxide emissions (tons) - Comprehensive utilization rate of industrial solid waste + Living standards of residents GDP per capita + Education expenditure per capita (RMB per person) + Number of hospital beds per 10,000 people + Follow Kantorowicz & González-Bustamante (2025), We employ natural language processing (NLP) to construct a city‑level index of rule‑of‑law development. First, we extract 30 rule‑of‑law seed terms from President Xi Jinping’s keynote speech at the inaugural Central Conference on Comprehensive Law-Based Governance in the Party’s history. These seed terms provide the foundation for constructing a legal textual corpus, including ideological constructs such as “Xi Jinping Thought on the Rule of Law,” the “path, system, and thought of socialist rule of law with Chinese characteristics,” as well as broader institutional goals such as building a “socialist rule-of-law state” and advancing “socialist rule-of-law development” and “socialist legal principles.” It also encompasses foundational concepts of legal governance, including law-based governance, law-based exercise of power, law-based administration, governance in accordance with the Constitution, and constitutional rule. Additional terms, such as fairness and justice, rule of law, legislation, law enforcement, the judiciary, legal compliance, the Constitution, laws, regulations, rule-based governance, legal dissemination, sound laws, good governance, and legal awareness through respecting, studying, and applying the law, are likewise included. Second, we segment the municipal government work reports into words and train a Word2Vec model to identify an extended lexicon of words semantically similar to the seeds. After manual review, we retain 21 rule‑of‑law terms (out of 100 candidates). These extended lexicon further incorporates expressions that emphasize lawful conduct and institutional compliance, such as “acting in accordance with the law,” “performing duties,” and “exercising power.” It also includes terms related to legal literacy and discipline, such as “legal studies,” “understanding the law,” “abiding by the law,” “observing discipline and law,” and “lawful governance.” Additionally, it captures key principles of law enforcement and judicial fairness through expressions like “civilized law enforcement,” “law-based law enforcement,” “impartial justice,” “strict law enforcement,” “strict enforcement of the law,” “holding violators accountable,” “fair enforcement,” and “enforcement according to law.” Terms such as “discipline observance,” “fairness,” “law and discipline,” “rule compliance,” “adherence to rules,” and “serving the public in accordance with the law” are also incorporated. We merge the extended lexicon with the original 30 seeds to create the rule‑of‑law dictionary. Finally, we compute the rule of law index as the ratio of rule-of-law related terms to the total number of words in the government work report. 3.2 Methodology To investigate the impact of rule of law on high-quality economic development, we construct the following two-way fixed effects model: $$\:{HQED}_{it}=\:{\beta\:}_{0}+{\beta\:}_{1}{RoLaw}_{it}+{\beta\:}_{2}{X}_{it}+{{\gamma\:}}_{i}+{{\delta\:}}_{t}+{\text{ϵ}}_{it}$$ 1 where \(\:{HQED}_{it}\) represents the high-quality economic development level in city \(\:i\:\) at year \(\:t\) ; \(\:{RoLaw}_{it}\) denotes the rule of law level in city \(\:i\:\) at year \(\:t\) ; \(\:{{\gamma\:}}_{i}\:\:\) and \(\:{{\delta\:}}_{t}\) refer to city fixed effects to control for time-invariant characteristics at the city level and year fixed effects to account for macroeconomic shocks or common year-specific factors, respectively; \(\:{\text{ϵ}}_{it}\) is the error term. Following Zhao et al. (2020), we also control for a vector of covariant variables \(\:{X}_{it}\) , including fiscal decentralization degree (FDD), represented by the ratio of fiscal budgeted revenues to expenditures; foreign direct investment (FDI), measured by the ratio of actual foreign capital usage to regional GDP; urbanization level (Urban), expressed as the logarithm of population density; and financial development level (Finance), indicated by the ratio of financial institutions’ deposit and loan balances to regional GDP. As authoritative policy documents, government work reports serve as programmatic blueprints for administrative action and the implementation of decisions. Consequently, the frequency and proportion of legal terminology in these reports offer a reliable proxy for the strength of local legal governance, while also improving the identification of causal effects. Moreover, because government work reports are typically released at the beginning of the year, subsequent outcome variables are unlikely to influence their content. This temporal sequencing helps to mitigate endogeneity concerns stemming from potential reverse causality. 4. Baseline Results 4.1 Summary statistics Table 2 presents the descriptive statistics for the key variables used in the empirical analysis. The wide range and relatively large standard deviation of HQED (compared to the mean) imply significant variation in development quality across cities and over time. The mean (0.522%) and median (0.506%) of the rule of law index are very close, indicating a roughly symmetric distribution. Table 2 Summary statistics Variable Abbreviation N Mean SD Min Median Max High-quality economic development index HQED 4438 0.029 0.708 -1.566 -0.050 2.721 Rule of law index RoLaw 4438 0.522 0.177 0.177 0.506 1.049 Fiscal decentralization degree FDD 4438 0.488 0.220 0.123 0.458 1.033 Foreign direct investment LnFDI 4438 9.857 1.922 4.263 9.924 13.92 Urbanization level Urban 4438 5.841 0.839 2.926 5.971 7.417 Financial development lLevel Finance 4438 2.254 1.100 0.876 1.917 6.422 4.2 Baseline regression analysis Table 3 shows the relationships between the high-quality economic development level and the rule of law level. Column 1 reports the association between the rule of law and HQED after controlling city fixed effects. The coefficient is positive and highly significant at the 1% level, suggesting that improvements in the rule of law are strongly associated with better economic development outcomes. The magnitude of the effect declines but still statistically significant at the 1% level in column ( 2 ), indicating a robust relationship even after accounting for economic and institutional controls. Column ( 3 ) introduce year fixed effects to control for macroeconomic shocks and policy changes. The rule of law consistently shows a positive and statistically significant association with high-quality economic development, supporting the argument that rule of law plays a foundational role in high-quality economic development. 4.3 Robustness tests We use an alternative measure of the rule of law, defined as the number of rule-of-law related words in government work reports. Additionally, the word count of the work report is included as a control to mitigate potential biases arising from differences in report length. Columns ( 1 ) to ( 3 ) of Table 4 mirror the specifications from Table 3 , subsequently adding control variables and year fixed effects. The coefficients on the alternative measure of the rule of law appears small due to the unit of word counts, the consistent sign and significance support the robustness of the relationship between rule of law and high-quality economic development. Table 3 Baseline results HQED ( 1 ) ( 2 ) ( 3 ) RoLaw 0.459*** 0.250*** 0.111*** (0.059) (0.044) (0.038) FDD -0.693*** 0.081 (0.155) (0.109) LnFDI 0.115*** -0.014* (0.011) (0.008) Urban 1.982*** 0.543** (0.330) (0.211) Finance 0.381*** -0.011 (0.028) (0.021) Constant -0.211*** -13.329*** -3.077** (0.031) (1.906) (1.257) City FE Yes Yes Yes Year FE No No Yes Observations 4,438 4,438 4,438 Number of Cities 266 266 266 Adjusted R-squared 0.557 0.774 0.896 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. Table 4 Alternative measure of rule of law HQED ( 1 ) ( 2 ) ( 3 ) RoLaw_A 0.008*** 0.004*** 0.002*** (0.001) (0.001) (0.001) FDD -0.677*** 0.081 (0.155) (0.109) LnFDI 0.114*** -0.014* (0.011) (0.008) Urban 1.970*** 0.553*** (0.327) (0.211) Finance 0.379*** -0.011 (0.028) (0.021) # of Words 0.000 -0.000 -0.000*** (0.000) (0.000) (0.000) Constant -0.330*** -13.198*** -3.025** (0.072) (1.886) (1.252) City FE Yes Yes Yes Year FE No No Yes Observations 4,438 4,438 4,438 Adjusted R-squared 0.566 0.775 0.896 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. To further ensure that our findings are not driven by specific sample characteristics or extraordinary events, we conduct robustness checks by excluding two sets of observations. First, we drop 23 major port cities. These cities have historically enjoyed preferential opening-up policies, display a higher degree of trade dependence, and possess distinct economic structures compared with inland cities. Including them in the baseline estimation may bias the results by overstating or masking the true effect of the rule of law on high-quality economic development. Columns ( 1 )-( 3 ) of Table 5 show the estimated results. Second, we exclude the years affected by the COVID-19 pandemic. The pandemic introduced unprecedented shocks to economic activities and policy interventions, which may distort the underlying relationship between institutional quality and development outcomes. Columns ( 4 )-( 6 ) drop the period affected by the COVID-19 pandemic. Across all specifications, the coefficient on rule of law remains positive and statistically significant, albeit with some variation in magnitude. The results demonstrate that our baseline results remain robust even when potentially confounding observations are excluded. Table 5 Excluding the impact of port cities and the COVID-19 pandemic HQED Excluding observations from port cities Excluding the impact of the COVID-19 pandemic ( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) ( 6 ) RoLaw 0.383*** 0.204*** 0.064** 0.368*** 0.258*** 0.111*** (0.054) (0.040) (0.032) (0.054) (0.043) (0.036) FDD -0.742*** -0.025 -0.498*** 0.150 (0.155) (0.105) (0.147) (0.103) LnFDI 0.111*** -0.005 0.121*** -0.018** (0.011) (0.007) (0.012) (0.008) Urban 1.927*** 0.490** 2.082*** 0.429** (0.285) (0.202) (0.365) (0.215) Finance 0.362*** -0.001 0.356*** -0.016 (0.025) (0.021) (0.030) (0.021) Constant -0.240*** -12.791*** -2.839** -0.235*** -14.033*** -2.463* (0.028) (1.615) (1.189) (0.028) (2.088) (1.275) City FE Yes Yes Yes Yes Yes Yes Year FE No No Yes No No Yes Observations 4,016 4,016 4,016 4,042 4,042 4,042 Adjusted R-squared 0.529 0.769 0.896 0.574 0.767 0.892 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. Cities participating in the National Innovative City Pilot program typically receive additional policy support, innovation funding, and institutional attention, which can directly enhance economic performance and structural transformation. To ensure the robustness of our baseline results, Table 6 incorporates the pilot program using a difference-in-differences framework. The results show that the positive effect of the rule of law on high-quality economic development remains statistically significant across all specifications. Although the coefficient of rule of law slightly declines when additional controls and year fixed effects are included, its positive direction persists, indicating the stability of our core finding. The interaction term “Pilot#Post” is consistently positive and highly significant, suggesting that cities participating in the pilot program experience higher high-quality economic development levels, yet its inclusion does not alter the main effect of rule of law. Overall, the results demonstrate that the rule of law plays a robust and substantial role in promoting regional economic quality, independent of potential policy shocks. Table 6 Controlling for national innovative city pilot HQED ( 1 ) ( 2 ) ( 3 ) RoLaw 0.332*** 0.201*** 0.067** (0.046) (0.037) (0.032) Pilot # Post 0.989*** 0.600*** 0.359*** (0.047) (0.051) (0.044) FDD -0.632*** 0.082 (0.130) (0.097) LnFDI 0.105*** -0.006 (0.010) (0.007) Urban 1.425*** 0.344* (0.295) (0.205) Finance 0.324*** -0.013 (0.023) (0.020) Constant -0.290*** -9.942*** -2.641** (0.0262) (1.706) (1.210) City FE Yes Yes Yes Year FE No No Yes Observations 4,438 4,438 4,438 Adjusted R-squared 0.290 0.588 0.799 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. High-quality economic development in the current period may simultaneously affect rule of law, creating reverse causality. By using the one-period lag of the rule of law, we ensure that the measure of rule of law precedes the outcome, capturing its predictive and causal effect on high-quality economic development. Table 7 examines the impact of the lagged rule of law on high-quality economic development to address potential endogeneity. The results show that stronger rule of law in the previous period significantly promote current high-quality economic development level across all specifications, indicating that rule of law exert a persistent, lagged, and robust influence on regional economic quality. Table 7 Effect of lagged rule of law on high-quality economic development HQED ( 1 ) ( 2 ) ( 3 ) L1.RoLaw 0.428*** 0.226*** 0.091** (0.058) (0.045) (0.038) FDD -0.691*** -0.001 (0.160) (0.110) LnFDI 0.116*** -0.014* (0.012) (0.008) Urban 1.825*** 0.462* (0.374) (0.245) Finance 0.376*** -0.015 (0.029) (0.020) Constant -0.152*** -12.417*** -3.159** (0.030) (2.160) (1.439) City FE Yes Yes Yes Year FE No No Yes Observations 4,037 4,037 4,037 Adjusted R-squared 0.024 0.499 0.762 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. Table 8 implements an instrumental variable (IV) approach, using the average rule of law in other cities within the same province and year as an instrument for local rule of law. This IV is appropriate because regional institutional environments tend to co-move within provinces due to shared governance and policy spillovers, making the average rule of law in neighboring cities highly correlated with a city’s own legal environment, while it is unlikely to directly affect a city’s economic outcomes other than through its impact on local rule of law. Panel A presents the first-stage results, showing that the IV strongly predicts local rule of law, with coefficients consistently above 0.4 and highly significant. Panel B reports the second-stage results, where the IV-estimated coefficients remain positive and statistically significant across all specifications, indicating that stronger rule of law causally enhance high-quality economic development. The Kleibergen-Paap Wald F-statistics far exceeding the conventional threshold, ruling out weak instrument concerns. Importantly, the results are robust to the inclusion of controls and fixed effects, reinforcing the conclusion that the rule of law exerts a substantial and causal impact on regional economic quality. Table 8 Instrumental variable approach ( 1 ) ( 2 ) ( 3 ) Panel A. First Stage RoLaw IV 0.851*** 0.838*** 0.413*** (0.024) (0.025) (0.039) Controls No Yes Yes City FE Yes Yes Yes Year FE No No Yes Panel B. Second Stage HQED \(\:\widehat{RoLaw}\) 1.046*** 0.513*** 0.906*** (0.100) (0.090) (0.341) KW F-statistic 1291.262 1126.270 111.132 Controls No Yes Yes City FE Yes Yes Yes Year FE No No Yes Observations 4,403 4,403 4,403 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. 5. Further analysis 5.1 Heterogeneity analysis Given the disparities in development levels and policy environments across regions, the impact of rule of law on high-quality economic development may exhibit regional heterogeneity. To investigate the heterogeneous effects, we classify municipalities directly under central government, sub-provincial cities, and provincial capitals as core cities, with all others categorized as non-core cities. We include an interaction term between the rule of law index and a dummy variable indicating the core cities in the baseline model. Table 9 shows the effects of the rule of law on high-quality economic development across different regions. The coefficients of interaction term across columns ( 1 ) to ( 3 ) are positive and statistically significant, indicating that in core cities, the additional effect of the rule of law on high-quality economic development is significantly higher than in non-cities. These findings suggest that rule of law may yield greater marginal outcomes in more developed or strategically important cities. For less-developed areas, complementary policies may be needed to unlock the benefits of the rule of law. Table 9 Heterogeneity analysis HQED ( 1 ) ( 2 ) ( 3 ) RoLaw # Core Cities 0.672*** 0.408** 0.459*** (0.240) (0.176) (0.126) RoLaw 0.359*** 0.189*** 0.041 (0.052) (0.039) (0.030) FDD -0.695*** 0.086 (0.155) (0.109) LnFDI 0.115*** -0.014* (0.011) (0.008) Urban 1.950*** 0.508** (0.322) (0.205) Finance 0.381*** -0.012 (0.028) (0.020) Constant -0.207*** -13.137*** -2.869** (0.029) (1.858) (1.219) City FE Yes Yes Yes Year FE No No Yes Observations 4,438 4,438 4,438 Adjusted R-squared 0.560 0.775 0.898 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. 5.2 Potential Channels The rule of law may promote high-quality economic development through innovation or entrepreneurship channels. First, it may stimulate innovation by strengthening intellectual property protection and contract enforcement, thereby encouraging investment in research and development. Second, it may enhance entrepreneurial vitality by reducing regulatory uncertainty and lowering institutional barriers to market entry. Furthermore, it may improve net firm entry by creating a fair, stable, and predictable business environment that facilitates both firm formation and orderly market exit. To empirically test the underlying channels, we construct three indicators to capture potential transmission channels. Specifically, innovation is measured as the natural logarithm of the number of patent applications per 10000 people. Entrepreneurial vitality is proxied by the natural logarithm of the number of newly registered firms per 10000 people. Net firm entry is captured by the natural logarithm of the difference between new firm entries and firm exits per 10000 people. All mediators are calculated at the city-year level and adjusted to reflect population-normalized activity in each mechanism domain. We re-estimate Model ( 1 ) by substituting the original dependent variable with each of the three channel variables, allowing us to test the underlying mechanisms through which the rule of law may affect high-quality economic development. Table 10 column ( 1 ) provides evidence that the innovation channel is actively at work. The coefficient of 0.198 implies that strengthening rule of law levels by one sample-standard-deviation raises patent density by roughly 3.5% (= 0.198*0.177), a non-trivial boost given China’s city-level dispersion in innovative output. As shown in Columns ( 2 ) and ( 3 ), the estimated coefficients on the rule of law are both small in magnitude and statistically insignificant, providing no significant evidence in support of the entrepreneurship channel. Table 10 Mechanisms Innovation Entrepreneurial vitality Net firm entry ( 1 ) ( 2 ) ( 3 ) RoLaw 0.198** -0.050 0.091 (0.097) (0.050) (0.071) FDD 0.435 -0.207* 0.030 (0.268) (0.122) (0.174) LnFDI 0.038* 0.054*** 0.032** (0.022) (0.011) (0.016) Urban 0.657* 0.384 0.736** (0.396) (0.249) (0.300) Finance 0.028 -0.035 -0.077** (0.047) (0.026) (0.035) Constant -2.348 4.638*** 2.542 (2.253) (1.467) (1.769) City FE Yes Yes Yes Year FE Yes Yes Yes Observations 4,360 4,416 4,416 Adjusted R-squared 0.868 0.829 0.707 Note: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively. 6. Conclusion This paper examines the role of the rule of law in shaping high-quality economic development by drawing on a panel of 4,438 city-year observations from 266 Chinese cities between 2003 and 2021. To capture the multidimensional nature of high-quality economic development, we construct a composite index through principal component analysis, incorporating dimensions of industrial structure, total factor productivity, technological innovation, ecological sustainability, and residents’ living standards. The rule of law is measured using a novel index derived from annual government work reports via natural language processing, which allows us to capture variations in institutional quality at the city level over time. Employing two-way fixed-effects regressions, we find robust evidence that stronger rule of law significantly enhances high-quality economic development level. These results remain stable when we use alternative measures of the rule of law, exclude potentially confounding observations, control the effects of national innovative city pilot program, and implement other robustness checks including lagged specifications and instrumental variable estimation. Beyond the average effect, heterogeneity analysis reveals that the benefits of the rule of law are more pronounced in core cities than in non-core cities, suggesting that institutional quality interacts with urban hierarchy in shaping development outcomes. Mechanism analysis further shows that the rule of law fosters high-quality economic development primarily by stimulating innovation, while its effects on entrepreneurship and net firm entry are statistically insignificant, pointing to innovation-driven growth as the dominant channel. Taken together, these findings underscore the pivotal role of the rule of law in promoting sustainable and high-quality economic growth. They not only enrich the literature on law and development by providing city-level evidence from a large emerging economy, but also yield important policy implications. Strengthening legal institutions and embedding the rule of law into the governance framework can serve as a powerful catalyst for the pursuit of high-quality economic development. Declarations Data availability Data will be made available through the corresponding author. Acknowledgements This work was supported by the Humanities and Social Science Fund of Ministry of Education of China (22YJC790055), the Natural Science Foundation of Shandong Province of China (ZR2024QA070), the Innovative Team of Excellent Young Scholars in Shandong Province of China (2024KJB016), the Postdoctoral Fellowship Program of CPSF (GZC20231476), and the Young Scholar Future Project of Shandong University. Author contributions XXX: Data collection and data analysis, Conceptualization, Methodology, Empirical analysis, Writing-original draft, Funding acquisition; XXX: Conceptualization, Methodology, Empirical analysis, Writing-original draft, Funding acquisition. Competing interests The authors declare no competing interests. Ethical approval Ethical approval was not required as the study did not involve human participants. Informed consent This study used publicly available data and needed no informed consent. Additional information Correspondence and requests for materials should be addressed to XXX. References Bai, X., Chen, J., & Shi, P. (2012). Landscape urbanization and economic growth in China: Positive feedbacks and sustainability dilemmas. Environmental Science & Technology, 46(1), 132-139. Brander, J. A., Cui, V., & Vertinsky, I. (2017). China and intellectual property rights: A challenge to the rule of law. Journal of International Business Studies, 48(7), 908-921. Chen, L., & Huo, C. (2022). The measurement and influencing factors of high-quality economic development in China. Sustainability, 14(15), 9293. Chen, L., Wang, X., Wang, Y., & Gao, P. (2023). 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Zhao, L., & Zhao, R. (2025). Ecological rule of law and enterprise green innovation - Evidence from China’s environmental courts. Journal of Environmental Management, 374, 124081. Zhao, T., Zhang, Z., & Liang, S. (2020). Digital economy, entrepreneurial activity, and high-quality development: Empirical evidence from Chinese cities. Journal of Management World, 36 (10), 65-76. (in Chinese) Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7550622","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":512916976,"identity":"fa0a472e-205a-409a-ad83-643f70e78bbb","order_by":0,"name":"Huicong Liang","email":"","orcid":"","institution":"Shandong University","correspondingAuthor":false,"prefix":"","firstName":"Huicong","middleName":"","lastName":"Liang","suffix":""},{"id":512916977,"identity":"3cac7bcf-a530-4a42-a445-b40f73932e5f","order_by":1,"name":"Jianwen Li","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA2ElEQVRIiWNgGAWjYBACxmYILcPG3sAgARJoIFYLDxvPASK1wAAPg0QCkVqY25mfPeapuMPDJ/n84W0eBhvZDQeYnz3A7zA2c2OeM8942KRzjK15GNKMNxxgMzfAr4XBTDq37TBIC5s0D8PhxA0HeNgk8Gth/yad+w+oRfL4M6CW/8Ro4QHa0nAYpMwMqOUAUVrKpP8cA2rhyTG2nGOQbDzzMJsZXi2G/ce3Sc6oOSwn33784Y03FXayfcebn+HX0oDCBQUVMz71QCBPQH4UjIJRMApGAQMDACszPqAXg8KfAAAAAElFTkSuQmCC","orcid":"","institution":"Shandong University","correspondingAuthor":true,"prefix":"","firstName":"Jianwen","middleName":"","lastName":"Li","suffix":""}],"badges":[],"createdAt":"2025-09-06 11:38:15","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-7550622/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7550622/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":97137331,"identity":"13cacdc6-f42e-4fcf-831b-8c6d58e1857c","added_by":"auto","created_at":"2025-12-01 09:57:36","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1065334,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7550622/v1/fd0881ee-464e-46df-807c-be2331ba83dc.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"The Rule of Law Driven High-Quality Economic Development: Evidence from China","fulltext":[{"header":"1. Introduction","content":"\u003cp\u003eHigh-quality economic development (HQED) can be measured through a variety of indicators that reflect a shift from traditional GDP-focused growth to a more comprehensive and sustainable approach. This approach is particularly relevant in countries like China, where the growth model is shifting from extensive, investment-driven expansion to more balanced, sustainable, and innovation-led development (Chen \u0026amp; Huo, 2022; Pan et al., 2021; Xu et al., 2025). Achieving high-quality economic development requires not only factor accumulation and industrial upgrading but also the presence of robust institutional frameworks that govern incentives, coordinate behavior, and shape the dissemination of information. Without such institutional underpinnings, productivity gains and structural transformation are unlikely to be sustained.\u003c/p\u003e\u003cp\u003eFoundational theories in the new institutional economics stress that secure property rights and credible contract enforcement are essential for reducing transaction costs and sustaining long-term growth (North, 1990). Comparative evidence supports this view. Cross-country analyses, such as Porta et al. (1998), demonstrate that legal systems protecting investor rights foster capital market deepening and long-run development. Global governance indicators, including the World Bank\u0026rsquo;s Worldwide Governance Indicators and the World Justice Project\u0026rsquo;s Rule of Law Index, consistently show that countries with stronger legal institutions enjoy higher levels of innovation, lower corruption, and more effective industrial transformation. In China, the institutional context exhibits distinct complexities. Empirical research suggests an inverted U-shaped relationship between judicial development and regional economic growth (Zhang et al., 2025). Strengthening intellectual property rights, expanding specialized courts, and enforcing legal protections have begun to shift incentives toward innovation and higher-quality industrial activities (Yueh, 2009; Brander et al., 2017). Firms located in regions with stronger legal institutions exhibit higher levels of patenting and green innovation, as clearer regulatory signals reduce uncertainty and alter strategic behavior (Zhao \u0026amp; Zhao, 2025). Conversely, bureaucratic entry barriers and opaque legal processes remain major obstacles to entrepreneurship and resource reallocation (Klapper et al., 2006).\u003c/p\u003e\u003cp\u003eDespite these insights, much of the existing evidence relies on national-level or provincial-level indicators. Such aggregate measures fail to capture the substantial institutional variation among China\u0026rsquo;s 300-plus prefecture-level cities, where governance quality, judicial capacity, and administrative transparency differ markedly. This gap motivates the central research question of this study, how, and to what extent, does the rule of law shape high-quality economic development at the city level?\u003c/p\u003e\u003cp\u003eGovernment work reports, which are annual, legally mandated documents that outline policy goals and review implementation, offer a rich yet under-exploited source for gauging local rule-of-law discourse. Leveraging this untapped resource, our research constructs annual city-level indicators of the rule of law from 2003 to 2021 using natural language processing techniques. This allows us to capture temporal variation and regional heterogeneity that national indices often overlook. To measure outcomes, we draw on Zhao et al. (2020) and apply principal component analysis to generate a composite index of high-quality economic development. By linking these two measures, our analysis investigates whether and how enhanced rule-of-law environments support high-quality economic development.\u003c/p\u003e\u003cp\u003eOur empirical analysis yields three key findings. First, strengthening the rule of law significantly promotes high-quality economic development, and the effect is both economically meaningful and statistically robust. The results hold when employing alternative measures of legal institutions, excluding potentially confounding cases, accounting for the national innovative city pilot program, and conducting further robustness checks such as lagged specifications and instrumental variable estimation. Second, the impact of the rule of law is heterogeneous. It is particularly pronounced in cities with higher strategic centrality, underscoring the spatial dimension of institutional effectiveness. Third, the mechanism analysis reveals that the rule of law primarily fosters high-quality development through innovation, while its direct effects on entrepreneurship and firm dynamics are comparatively limited.\u003c/p\u003e\u003cp\u003eThis study offers three primary contributions. First, it introduces a novel, document-based measure of the rule of law that captures temporal and policy nuance often missing from conventional indices. This approach complements existing measures and offers replicability for future governance studies. Second, by disaggregating the analysis to the city-year level for 266 Chinese cities over nearly two decades, we provide fine-grained empirical evidence on how local rule of law influences development outcomes in an emerging economy context. This city-level perspective helps uncover spatial heterogeneity and highlights the distinct challenges faced by core versus non-core cities. Third, by linking the rule of law to high-quality economic development, our findings extend the literature on law and development from a narrow focus on growth and investment to broader aspects of development quality. The results not only advance theoretical understanding but also offer actionable insights for policymakers seeking to foster regionally balanced, law-based governance reforms that sustain long-term economic upgrading.\u003c/p\u003e\u003cp\u003eThe remainder of this paper is organized as follows. Section 2 review the related literature. Section 3 introduces the data and the research methodology. Section 4 provides the summary statistics, baseline results, and robustness tests. Section 5 shows findings of heterogeneity analysis and mechanism analysis. Finally, Section 6 concludes the paper.\u003c/p\u003e"},{"header":"2. Literature Review","content":"\u003cdiv id=\"Sec3\" class=\"Section2\"\u003e\u003ch2\u003e2.1 The framework for measuring high-quality economic development\u003c/h2\u003e\u003cp\u003eMeasuring high-quality economic development requires moving beyond traditional metrics like economic growth rate to adopt a multi-dimensional framework (Chen \u0026amp; Huo, 2022). This is typically achieved by constructing a comprehensive evaluation index system based on key dimensions that reflect a holistic view of societal process. A consistent theme across numerous studies is the use of five dimensional framework based on the \u0026ldquo;new development concepts\u0026rdquo; to define and measure high-quality economic development. These five core dimensions are innovation, coordination, green development, openness, and sharing (Li et al., 2023). Some frameworks expand this to include other dimensions like economic quality, social civilization, and security to create an even more comprehensive picture (Chen et al., 2023).\u003c/p\u003e\u003cp\u003eInnovation is considered the primary driving force of high-quality economic development, determining the speed and efficiency of development. Indicators for this dimension often focus on R\u0026amp;D inputs and outputs, such as R\u0026amp;D expenditure, patent applications per capita, and the number of scientific research institutions (Zhang et al., 2024a). Coordination addresses the need for balance between different regions, between urban and rural areas, between economic and social structures (He et al., 2025). This dimension is measured using indicators like GDP per capita, the tertiary-secondary industry coordination ratio, the ratio of urban-rural income (Zeng et al., 2023; Zeng et al., 2024). Green development emphasizes forming an industrial structure and lifestyle that conserves resources, protect the environment, and achieves harmony between humanity and nature (Chen \u0026amp; Huo, 2022; Li et al., 2025). It includes the intensity of pollution control, energy consumption per unit of GDP, carbon emissions, among others (He et al., 2025; Liu et al., 2024). Openness involves building a higher level of integration with the global economy, which facilitates learning, trade, and investment. This dimension is measured by indicators such as the degree of dependence on foreign trade, the foreign investment (Zeng et al., 2024). Sharing is rooted in the principle of being people-oriented. It ensures that all people participate in and benefit from development, progressing towards common prosperity. Measurement indicators of this dimension include public services, people\u0026rsquo;s living conditions, educational attainment, and among others (Zhao et al., 2020).\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec4\" class=\"Section2\"\u003e\u003ch2\u003e2.2 The quantitative methodologies for assessment of high-quality economic development\u003c/h2\u003e\u003cp\u003eThe assessment of high-quality economic development relies on a variety of quantitative methodologies to transform complex, multidimensional data into coherent and interpretable results. Principal component analysis (PCA) is used to combine numerous economic development indicators into uncorrelated components, reducing issues of multicollinearity and differing magnitudes (Chen \u0026amp; Huo, 2022; Zhao et al., 2020). Entropy weight method is used to determine the weight of different economic indicators in a composite index, avoiding the subjectivity of expert-based weighting (Chen et al., 2023; Wen et al., 2024). Factor analysis, similar to PCA, is employed to identify the underlying dimensions of high-quality economic development from a large set of indicators and to estimate the overall economic development level (Li et al., 2023). Machine learning models, such as K-means clustering, are used to classify regions into distinct development types, revealing spatial patterns and disparities (Pang \u0026amp; Nie, 2025; Wang, 2024).\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec5\" class=\"Section2\"\u003e\u003ch2\u003e2.3 The key factors driving high-quality economic development\u003c/h2\u003e\u003cp\u003eThe specific characteristics that drive high-quality economic development are multifaceted and interconnected, moving beyond simple economic growth to a comprehensive emphasis on its quality, sustainability, and inclusiveness. A growing body of empirical research highlights a wide spectrum of drivers underpinning high-quality economic growth. Foreign direct investment facilitates technology spillovers and thereby reinforces long-term development (Zhang et al., 2024b). Structural upgrading through improvements in industrial composition, infrastructure, and digital finance not only boosts productivity but also delivers co-benefits in environmental performance (Bai et al., 2012; Chen \u0026amp; Huo, 2022). Urbanization generates agglomeration economies that accelerate growth trajectories (Li, 2017), while fiscal decentralization enhances the quality and sustainability of development (Li \u0026amp; Gu, 2025).\u003c/p\u003e\u003cp\u003eBeyond these macro-level factors, recent studies reveal several new drivers. Technological innovation remains a core source of productivity growth (Gang \u0026amp; Zhao, 2025; Zhang et al., 2024c). National industrial transfer demonstration zones also play an important role (Zhang \u0026amp; He, 2025). The clustering of manufacturing and high-tech industries strengthens regional competitiveness (Guo \u0026amp; Sun, 2023; Huang et al., 2025). Environmental regulation provides a disciplining force that supports sustainability (Du, 2023). Digital financial inclusion expands access to resources and improves efficiency (Ding \u0026amp; Kang, 2024). Urban investment bonds increase local fiscal capacity and strengthen infrastructure financing (Zhang \u0026amp; Su, 2025). Education enhances human capital and serves as a long-term foundation for innovation-driven growth (Yu \u0026amp; Liu, 2025).\u003c/p\u003e\u003cp\u003eIn sum, the literature has substantially advanced our understanding of the multifaceted drivers of high-quality economic development. Prior work highlights the importance of industrial upgrading, financial deepening, technological innovation, and human capital accumulation. Nevertheless, although economic and structural factors have been extensively examined, the rule of law which is widely regarded as a cornerstone of the institutional environment remains underexplored at the city level. Addressing this gap forms the basis of the present study.\u003c/p\u003e\u003c/div\u003e"},{"header":"3. Data and methodology","content":"\u003cdiv id=\"Sec7\" class=\"Section2\"\u003e\u003ch2\u003e3.1 Data\u003c/h2\u003e\u003cp\u003eThis study uses city-level data sourced from the municipal government work reports, the Chinese Research Data Services Platform (CNRDS), and the China Urban Statistical Yearbook for the period 2003\u0026ndash;2021. To mitigate outliers, we winsorize all continuous variables at the 1st and 99th percentiles (i.e., replacing observations below the 1st percentile and above the 99th percentile with the respective threshold values). After dropping observations with missing values on the key variables, we retain 4438 city-year observations for 266 cities during 2003\u0026ndash;2021.\u003c/p\u003e\u003cp\u003eSpecifically, we follow Zhao et al. (2020) to derive five second‑level indicators, industrial structure, total factor productivity (TFP), technological innovation, ecological environment, and residents\u0026rsquo; living standards, to capture the multidimensional concept of high‑quality economic development (HQED), as detailed in Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e. We apply Principal Component Analysis to construct a composite HQED index. We retain the first four principal components (eigenvalues\u0026thinsp;\u0026gt;\u0026thinsp;1, Kaiser criterion). Together, the four retained components explain 77.53% of the total variance, and the components are weighted by their explained variance to form the composite HQED index.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eEvaluation system for HQED index\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003ePrimary index\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eSecondary index\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eTertiary index\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eIndex attribute\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"9\" rowspan=\"10\"\u003e\u003cp\u003eHigh-quality economic development index\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\" morerows=\"2\" rowspan=\"3\"\u003e\u003cp\u003eIndustrial structure\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eAdvancement of industrial structure\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eRationalization of industrial structure\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eProportion of productive service industries\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eTFP\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eTotal factor productivity\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eTechnological innovation\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eInnovation index\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eEcological environment\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eIndustrial sulfur dioxide emissions (tons)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eComprehensive utilization rate of industrial solid waste\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\" morerows=\"2\" rowspan=\"3\"\u003e\u003cp\u003eLiving standards of residents\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eGDP \u003cem\u003eper capita\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eEducation expenditure \u003cem\u003eper capita\u003c/em\u003e (RMB per person)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNumber of hospital beds per 10,000 people\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e+\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eFollow Kantorowicz \u0026amp; Gonz\u0026aacute;lez-Bustamante (2025), We employ natural language processing (NLP) to construct a city‑level index of rule‑of‑law development. First, we extract 30 rule‑of‑law seed terms from President Xi Jinping\u0026rsquo;s keynote speech at the inaugural Central Conference on Comprehensive Law-Based Governance in the Party\u0026rsquo;s history. These seed terms provide the foundation for constructing a legal textual corpus, including ideological constructs such as \u0026ldquo;Xi Jinping Thought on the Rule of Law,\u0026rdquo; the \u0026ldquo;path, system, and thought of socialist rule of law with Chinese characteristics,\u0026rdquo; as well as broader institutional goals such as building a \u0026ldquo;socialist rule-of-law state\u0026rdquo; and advancing \u0026ldquo;socialist rule-of-law development\u0026rdquo; and \u0026ldquo;socialist legal principles.\u0026rdquo; It also encompasses foundational concepts of legal governance, including law-based governance, law-based exercise of power, law-based administration, governance in accordance with the Constitution, and constitutional rule. Additional terms, such as fairness and justice, rule of law, legislation, law enforcement, the judiciary, legal compliance, the Constitution, laws, regulations, rule-based governance, legal dissemination, sound laws, good governance, and legal awareness through respecting, studying, and applying the law, are likewise included.\u003c/p\u003e\u003cp\u003eSecond, we segment the municipal government work reports into words and train a Word2Vec model to identify an extended lexicon of words semantically similar to the seeds. After manual review, we retain 21 rule‑of‑law terms (out of 100 candidates). These extended lexicon further incorporates expressions that emphasize lawful conduct and institutional compliance, such as \u0026ldquo;acting in accordance with the law,\u0026rdquo; \u0026ldquo;performing duties,\u0026rdquo; and \u0026ldquo;exercising power.\u0026rdquo; It also includes terms related to legal literacy and discipline, such as \u0026ldquo;legal studies,\u0026rdquo; \u0026ldquo;understanding the law,\u0026rdquo; \u0026ldquo;abiding by the law,\u0026rdquo; \u0026ldquo;observing discipline and law,\u0026rdquo; and \u0026ldquo;lawful governance.\u0026rdquo; Additionally, it captures key principles of law enforcement and judicial fairness through expressions like \u0026ldquo;civilized law enforcement,\u0026rdquo; \u0026ldquo;law-based law enforcement,\u0026rdquo; \u0026ldquo;impartial justice,\u0026rdquo; \u0026ldquo;strict law enforcement,\u0026rdquo; \u0026ldquo;strict enforcement of the law,\u0026rdquo; \u0026ldquo;holding violators accountable,\u0026rdquo; \u0026ldquo;fair enforcement,\u0026rdquo; and \u0026ldquo;enforcement according to law.\u0026rdquo; Terms such as \u0026ldquo;discipline observance,\u0026rdquo; \u0026ldquo;fairness,\u0026rdquo; \u0026ldquo;law and discipline,\u0026rdquo; \u0026ldquo;rule compliance,\u0026rdquo; \u0026ldquo;adherence to rules,\u0026rdquo; and \u0026ldquo;serving the public in accordance with the law\u0026rdquo; are also incorporated. We merge the extended lexicon with the original 30 seeds to create the rule‑of‑law dictionary.\u003c/p\u003e\u003cp\u003eFinally, we compute the rule of law index as the ratio of rule-of-law related terms to the total number of words in the government work report.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec8\" class=\"Section2\"\u003e\u003ch2\u003e3.2 Methodology\u003c/h2\u003e\u003cp\u003eTo investigate the impact of rule of law on high-quality economic development, we construct the following two-way fixed effects model:\u003cdiv id=\"Equ1\" class=\"Equation\"\u003e\u003cdiv format=\"TEX\" class=\"mathdisplay\" id=\"FileID_Equ1\" name=\"EquationSource\"\u003e\n$$\\:{HQED}_{it}=\\:{\\beta\\:}_{0}+{\\beta\\:}_{1}{RoLaw}_{it}+{\\beta\\:}_{2}{X}_{it}+{{\\gamma\\:}}_{i}+{{\\delta\\:}}_{t}+{\\text{ϵ}}_{it}$$\u003c/div\u003e\u003cdiv class=\"EquationNumber\"\u003e1\u003c/div\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003ewhere \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:{HQED}_{it}\\)\u003c/span\u003e\u003c/span\u003e represents the high-quality economic development level in city \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:i\\:\\)\u003c/span\u003e\u003c/span\u003eat year \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:t\\)\u003c/span\u003e\u003c/span\u003e; \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:{RoLaw}_{it}\\)\u003c/span\u003e\u003c/span\u003e denotes the rule of law level in city \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:i\\:\\)\u003c/span\u003e\u003c/span\u003eat year \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:t\\)\u003c/span\u003e\u003c/span\u003e; \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:{{\\gamma\\:}}_{i}\\:\\:\\)\u003c/span\u003e\u003c/span\u003eand \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:{{\\delta\\:}}_{t}\\)\u003c/span\u003e\u003c/span\u003e refer to city fixed effects to control for time-invariant characteristics at the city level and year fixed effects to account for macroeconomic shocks or common year-specific factors, respectively; \u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:{\\text{ϵ}}_{it}\\)\u003c/span\u003e\u003c/span\u003e is the error term. Following Zhao et al. (2020), we also control for a vector of covariant variables\u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:{X}_{it}\\)\u003c/span\u003e\u003c/span\u003e, including fiscal decentralization degree (FDD), represented by the ratio of fiscal budgeted revenues to expenditures; foreign direct investment (FDI), measured by the ratio of actual foreign capital usage to regional GDP; urbanization level (Urban), expressed as the logarithm of population density; and financial development level (Finance), indicated by the ratio of financial institutions\u0026rsquo; deposit and loan balances to regional GDP.\u003c/p\u003e\u003cp\u003eAs authoritative policy documents, government work reports serve as programmatic blueprints for administrative action and the implementation of decisions. Consequently, the frequency and proportion of legal terminology in these reports offer a reliable proxy for the strength of local legal governance, while also improving the identification of causal effects. Moreover, because government work reports are typically released at the beginning of the year, subsequent outcome variables are unlikely to influence their content. This temporal sequencing helps to mitigate endogeneity concerns stemming from potential reverse causality.\u003c/p\u003e\u003c/div\u003e"},{"header":"4. Baseline Results","content":"\u003cdiv id=\"Sec10\" class=\"Section2\"\u003e\u003ch2\u003e4.1 Summary statistics\u003c/h2\u003e\u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e presents the descriptive statistics for the key variables used in the empirical analysis. The wide range and relatively large standard deviation of HQED (compared to the mean) imply significant variation in development quality across cities and over time. The mean (0.522%) and median (0.506%) of the rule of law index are very close, indicating a roughly symmetric distribution.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eSummary statistics\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"8\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eVariable\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eAbbreviation\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eN\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eMean\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eSD\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003eMin\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c7\"\u003e\u003cp\u003eMedian\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c8\"\u003e\u003cp\u003eMax\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eHigh-quality economic development index\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cem\u003eHQED\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.029\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.708\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e\u003cp\u003e-1.566\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e\u003cp\u003e-0.050\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e\u003cp\u003e2.721\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eRule of law index\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cem\u003eRoLaw\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.522\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.177\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e\u003cp\u003e0.177\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e\u003cp\u003e0.506\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e\u003cp\u003e1.049\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eFiscal decentralization degree\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.488\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.220\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e\u003cp\u003e0.123\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e\u003cp\u003e0.458\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e\u003cp\u003e1.033\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eForeign direct investment\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e9.857\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e1.922\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e\u003cp\u003e4.263\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e\u003cp\u003e9.924\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e\u003cp\u003e13.92\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eUrbanization level\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e5.841\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.839\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e\u003cp\u003e2.926\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e\u003cp\u003e5.971\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e\u003cp\u003e7.417\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eFinancial development lLevel\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e2.254\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e1.100\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e\u003cp\u003e0.876\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e\u003cp\u003e1.917\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e\u003cp\u003e6.422\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec11\" class=\"Section2\"\u003e\u003ch2\u003e4.2 Baseline regression analysis\u003c/h2\u003e\u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e shows the relationships between the high-quality economic development level and the rule of law level. Column 1 reports the association between the rule of law and HQED after controlling city fixed effects. The coefficient is positive and highly significant at the 1% level, suggesting that improvements in the rule of law are strongly associated with better economic development outcomes. The magnitude of the effect declines but still statistically significant at the 1% level in column (\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e), indicating a robust relationship even after accounting for economic and institutional controls. Column (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e) introduce year fixed effects to control for macroeconomic shocks and policy changes. The rule of law consistently shows a positive and statistically significant association with high-quality economic development, supporting the argument that rule of law plays a foundational role in high-quality economic development.\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec12\" class=\"Section2\"\u003e\u003ch2\u003e4.3 Robustness tests\u003c/h2\u003e\u003cp\u003eWe use an alternative measure of the rule of law, defined as the number of rule-of-law related words in government work reports. Additionally, the word count of the work report is included as a control to mitigate potential biases arising from differences in report length. Columns (\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e) to (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e) of Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e mirror the specifications from Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e, subsequently adding control variables and year fixed effects. The coefficients on the alternative measure of the rule of law appears small due to the unit of word counts, the consistent sign and significance support the robustness of the relationship between rule of law and high-quality economic development.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eBaseline results\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003e\u003cem\u003eHQED\u003c/em\u003e\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eRoLaw\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.459***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.250***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.111***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.059)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.044)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.038)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.693***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.081\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.155)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.109)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.115***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.014*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.011)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.008)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1.982***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.543**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.330)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.211)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.381***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.011\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.028)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.021)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-0.211***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-13.329***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-3.077**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.031)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1.906)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.257)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eNumber of Cities\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e266\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e266\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e266\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.557\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.774\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.896\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eAlternative measure of rule of law\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003eHQED\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eRoLaw_A\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.008***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.004***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.002***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.001)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.001)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.001)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.677***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.081\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.155)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.109)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.114***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.014*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.011)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.008)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1.970***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.553***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.327)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.211)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.379***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.011\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.028)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.021)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cem\u003e# of Words\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.000\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.000\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.000***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.000)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.000)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.000)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-0.330***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-13.198***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-3.025**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.072)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1.886)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.252)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.566\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.775\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.896\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eTo further ensure that our findings are not driven by specific sample characteristics or extraordinary events, we conduct robustness checks by excluding two sets of observations. First, we drop 23 major port cities. These cities have historically enjoyed preferential opening-up policies, display a higher degree of trade dependence, and possess distinct economic structures compared with inland cities. Including them in the baseline estimation may bias the results by overstating or masking the true effect of the rule of law on high-quality economic development. Columns (\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)-(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e) of Table\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e5\u003c/span\u003e show the estimated results. Second, we exclude the years affected by the COVID-19 pandemic. The pandemic introduced unprecedented shocks to economic activities and policy interventions, which may distort the underlying relationship between institutional quality and development outcomes. Columns (\u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e4\u003c/span\u003e)-(\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e) drop the period affected by the COVID-19 pandemic. Across all specifications, the coefficient on rule of law remains positive and statistically significant, albeit with some variation in magnitude. The results demonstrate that our baseline results remain robust even when potentially confounding observations are excluded.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eExcluding the impact of port cities and the COVID-19 pandemic\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"7\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"6\" nameend=\"c7\" namest=\"c2\"\u003e\u003cp\u003eHQED\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003eExcluding observations from port cities\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colspan=\"3\" nameend=\"c7\" namest=\"c5\"\u003e\u003cp\u003eExcluding the impact of the COVID-19 pandemic\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e4\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e5\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eRoLaw\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.383***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.204***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.064**\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.368***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.258***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e0.111***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.054)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.040)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.032)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(0.054)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(0.043)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(0.036)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.742***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.025\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e-0.498***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e0.150\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.155)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.105)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(0.147)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(0.103)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.111***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.005\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.121***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e-0.018**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.011)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.007)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(0.012)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(0.008)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1.927***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.490**\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e2.082***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e0.429**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.285)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.202)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(0.365)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(0.215)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.362***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.001\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.356***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e-0.016\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.025)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.021)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(0.030)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(0.021)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-0.240***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-12.791***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-2.839**\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e-0.235***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e-14.033***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e-2.463*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.028)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1.615)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.189)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(0.028)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e(2.088)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e(1.275)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,016\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,016\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,016\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e4,042\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e4,042\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e4,042\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.529\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.769\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.896\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.574\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.767\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e0.892\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"7\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eCities participating in the National Innovative City Pilot program typically receive additional policy support, innovation funding, and institutional attention, which can directly enhance economic performance and structural transformation. To ensure the robustness of our baseline results, Table\u0026nbsp;\u003cspan refid=\"Tab6\" class=\"InternalRef\"\u003e6\u003c/span\u003e incorporates the pilot program using a difference-in-differences framework. The results show that the positive effect of the rule of law on high-quality economic development remains statistically significant across all specifications. Although the coefficient of rule of law slightly declines when additional controls and year fixed effects are included, its positive direction persists, indicating the stability of our core finding. The interaction term \u0026ldquo;Pilot#Post\u0026rdquo; is consistently positive and highly significant, suggesting that cities participating in the pilot program experience higher high-quality economic development levels, yet its inclusion does not alter the main effect of rule of law. Overall, the results demonstrate that the rule of law plays a robust and substantial role in promoting regional economic quality, independent of potential policy shocks.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab6\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 6\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eControlling for national innovative city pilot\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003e\u003cem\u003eHQED\u003c/em\u003e\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eRoLaw\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.332***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.201***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.067**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.046)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.037)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.032)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003ePilot # Post\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.989***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.600***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.359***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.047)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.051)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.044)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.632***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.082\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.130)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.097)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.105***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.006\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.010)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.007)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1.425***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.344*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.295)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.205)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.324***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.013\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.023)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.020)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-0.290***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-9.942***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-2.641**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.0262)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1.706)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.210)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.290\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.588\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.799\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eHigh-quality economic development in the current period may simultaneously affect rule of law, creating reverse causality. By using the one-period lag of the rule of law, we ensure that the measure of rule of law precedes the outcome, capturing its predictive and causal effect on high-quality economic development. Table\u0026nbsp;\u003cspan refid=\"Tab7\" class=\"InternalRef\"\u003e7\u003c/span\u003e examines the impact of the lagged rule of law on high-quality economic development to address potential endogeneity. The results show that stronger rule of law in the previous period significantly promote current high-quality economic development level across all specifications, indicating that rule of law exert a persistent, lagged, and robust influence on regional economic quality.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab7\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 7\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eEffect of lagged rule of law on high-quality economic development\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003e\u003cem\u003eHQED\u003c/em\u003e\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eL1.RoLaw\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.428***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.226***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.091**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.058)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.045)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.038)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.691***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.001\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.160)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.110)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.116***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.014*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.012)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.008)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1.825***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.462*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.374)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.245)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.376***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.015\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.029)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.020)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-0.152***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-12.417***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-3.159**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.030)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(2.160)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.439)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,037\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,037\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,037\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.024\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.499\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.762\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab8\" class=\"InternalRef\"\u003e8\u003c/span\u003e implements an instrumental variable (IV) approach, using the average rule of law in other cities within the same province and year as an instrument for local rule of law. This IV is appropriate because regional institutional environments tend to co-move within provinces due to shared governance and policy spillovers, making the average rule of law in neighboring cities highly correlated with a city\u0026rsquo;s own legal environment, while it is unlikely to directly affect a city\u0026rsquo;s economic outcomes other than through its impact on local rule of law. Panel A presents the first-stage results, showing that the IV strongly predicts local rule of law, with coefficients consistently above 0.4 and highly significant. Panel B reports the second-stage results, where the IV-estimated coefficients remain positive and statistically significant across all specifications, indicating that stronger rule of law causally enhance high-quality economic development. The Kleibergen-Paap Wald F-statistics far exceeding the conventional threshold, ruling out weak instrument concerns. Importantly, the results are robust to the inclusion of controls and fixed effects, reinforcing the conclusion that the rule of law exerts a substantial and causal impact on regional economic quality.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab8\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 8\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eInstrumental variable approach\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003ePanel A. First Stage\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003eRoLaw\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eIV\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.851***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.838***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.413***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.024)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.025)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.039)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eControls\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003ePanel B. Second Stage\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003eHQED\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cspan class=\"InlineEquation\"\u003e\u003cspan class=\"mathinline\"\u003e\\(\\:\\widehat{RoLaw}\\)\u003c/span\u003e\u003c/span\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e1.046***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.513***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.906***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.100)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.090)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.341)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eKW F-statistic\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e1291.262\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1126.270\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e111.132\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eControls\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,403\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,403\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,403\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003c/div\u003e"},{"header":"5. Further analysis","content":"\u003cdiv id=\"Sec14\" class=\"Section2\"\u003e\u003ch2\u003e5.1 Heterogeneity analysis\u003c/h2\u003e\u003cp\u003eGiven the disparities in development levels and policy environments across regions, the impact of rule of law on high-quality economic development may exhibit regional heterogeneity. To investigate the heterogeneous effects, we classify municipalities directly under central government, sub-provincial cities, and provincial capitals as core cities, with all others categorized as non-core cities. We include an interaction term between the rule of law index and a dummy variable indicating the core cities in the baseline model.\u003c/p\u003e\u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab9\" class=\"InternalRef\"\u003e9\u003c/span\u003e shows the effects of the rule of law on high-quality economic development across different regions. The coefficients of interaction term across columns (\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e) to (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e) are positive and statistically significant, indicating that in core cities, the additional effect of the rule of law on high-quality economic development is significantly higher than in non-cities. These findings suggest that rule of law may yield greater marginal outcomes in more developed or strategically important cities. For less-developed areas, complementary policies may be needed to unlock the benefits of the rule of law.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab9\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 9\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eHeterogeneity analysis\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"3\" nameend=\"c4\" namest=\"c2\"\u003e\u003cp\u003e\u003cem\u003eHQED\u003c/em\u003e\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eRoLaw # Core Cities\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.672***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.408**\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.459***\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.240)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.176)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.126)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eRoLaw\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.359***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.189***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.041\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.052)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.039)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.030)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.695***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.086\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.155)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.109)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.115***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.014*\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.011)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.008)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e1.950***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.508**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.322)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.205)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.381***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.012\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.028)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.020)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-0.207***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-13.137***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-2.869**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.029)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1.858)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.219)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eNo\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,438\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.560\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.775\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.898\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003c/div\u003e\u003cdiv id=\"Sec15\" class=\"Section2\"\u003e\u003ch2\u003e5.2 Potential Channels\u003c/h2\u003e\u003cp\u003eThe rule of law may promote high-quality economic development through innovation or entrepreneurship channels. First, it may stimulate innovation by strengthening intellectual property protection and contract enforcement, thereby encouraging investment in research and development. Second, it may enhance entrepreneurial vitality by reducing regulatory uncertainty and lowering institutional barriers to market entry. Furthermore, it may improve net firm entry by creating a fair, stable, and predictable business environment that facilitates both firm formation and orderly market exit.\u003c/p\u003e\u003cp\u003eTo empirically test the underlying channels, we construct three indicators to capture potential transmission channels. Specifically, innovation is measured as the natural logarithm of the number of patent applications per 10000 people. Entrepreneurial vitality is proxied by the natural logarithm of the number of newly registered firms per 10000 people. Net firm entry is captured by the natural logarithm of the difference between new firm entries and firm exits per 10000 people. All mediators are calculated at the city-year level and adjusted to reflect population-normalized activity in each mechanism domain.\u003c/p\u003e\u003cp\u003eWe re-estimate Model (\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e) by substituting the original dependent variable with each of the three channel variables, allowing us to test the underlying mechanisms through which the rule of law may affect high-quality economic development. Table\u0026nbsp;\u003cspan refid=\"Tab10\" class=\"InternalRef\"\u003e10\u003c/span\u003e column (\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e) provides evidence that the innovation channel is actively at work. The coefficient of 0.198 implies that strengthening rule of law levels by one sample-standard-deviation raises patent density by roughly 3.5% (=\u0026thinsp;0.198*0.177), a non-trivial boost given China\u0026rsquo;s city-level dispersion in innovative output. As shown in Columns (\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e) and (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e), the estimated coefficients on the rule of law are both small in magnitude and statistically insignificant, providing no significant evidence in support of the entrepreneurship channel.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab10\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 10\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eMechanisms\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"4\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eInnovation\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eEntrepreneurial vitality\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eNet firm entry\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e3\u003c/span\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eRoLaw\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.198**\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.050\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.091\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.097)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.050)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.071)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFDD\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.435\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.207*\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.030\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.268)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.122)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.174)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eLnFDI\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.038*\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.054***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.032**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.022)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.011)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.016)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eUrban\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.657*\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.384\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.736**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.396)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.249)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.300)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003e\u003cem\u003eFinance\u003c/em\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.028\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e-0.035\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e-0.077**\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(0.047)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(0.026)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(0.035)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eConstant\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e-2.348\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4.638***\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e2.542\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e(2.253)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1.467)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e(1.769)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCity FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eYear FE\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eYes\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eObservations\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e4,360\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e4,416\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e4,416\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003eAdjusted R-squared\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.868\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.829\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.707\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"4\"\u003eNote: Standard errors clustered at the city level are reported in parentheses. ***, **, and * indicate statistical significance at the 1%, 5%, and 10% levels, respectively.\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003c/div\u003e"},{"header":"6. Conclusion","content":"\u003cp\u003eThis paper examines the role of the rule of law in shaping high-quality economic development by drawing on a panel of 4,438 city-year observations from 266 Chinese cities between 2003 and 2021. To capture the multidimensional nature of high-quality economic development, we construct a composite index through principal component analysis, incorporating dimensions of industrial structure, total factor productivity, technological innovation, ecological sustainability, and residents\u0026rsquo; living standards. The rule of law is measured using a novel index derived from annual government work reports via natural language processing, which allows us to capture variations in institutional quality at the city level over time. Employing two-way fixed-effects regressions, we find robust evidence that stronger rule of law significantly enhances high-quality economic development level. These results remain stable when we use alternative measures of the rule of law, exclude potentially confounding observations, control the effects of national innovative city pilot program, and implement other robustness checks including lagged specifications and instrumental variable estimation.\u003c/p\u003e\u003cp\u003eBeyond the average effect, heterogeneity analysis reveals that the benefits of the rule of law are more pronounced in core cities than in non-core cities, suggesting that institutional quality interacts with urban hierarchy in shaping development outcomes. Mechanism analysis further shows that the rule of law fosters high-quality economic development primarily by stimulating innovation, while its effects on entrepreneurship and net firm entry are statistically insignificant, pointing to innovation-driven growth as the dominant channel. Taken together, these findings underscore the pivotal role of the rule of law in promoting sustainable and high-quality economic growth. They not only enrich the literature on law and development by providing city-level evidence from a large emerging economy, but also yield important policy implications. Strengthening legal institutions and embedding the rule of law into the governance framework can serve as a powerful catalyst for the pursuit of high-quality economic development.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003cstrong\u003eData availability\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eData will be made available through the corresponding author.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eAcknowledgements\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis work was supported by the Humanities and Social Science Fund of Ministry of Education of China (22YJC790055), the Natural Science Foundation of Shandong Province of China (ZR2024QA070), the Innovative Team of Excellent Young Scholars in Shandong Province of China (2024KJB016), the Postdoctoral Fellowship Program of CPSF (GZC20231476), and the Young Scholar Future Project of Shandong University.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eAuthor contributions\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eXXX: Data collection and data analysis, Conceptualization, Methodology, Empirical analysis, Writing-original draft, Funding acquisition; XXX: Conceptualization, Methodology, Empirical analysis, Writing-original draft, Funding acquisition.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eCompeting interests\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe authors declare no competing interests.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eEthical approval\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eEthical approval was not required as the study did not involve human participants.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eInformed consent\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study used publicly available data and needed no informed consent.\u003c/p\u003e\n\n\u003cp\u003e\u003cstrong\u003eAdditional information\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eCorrespondence and requests for materials should be addressed to XXX.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\n\u003cli\u003eBai, X., Chen, J., \u0026amp; Shi, P. 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(in Chinese)\u003c/li\u003e\n\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Rule of law, High-quality economic development, Innovation, Entrepreneurship","lastPublishedDoi":"10.21203/rs.3.rs-7550622/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7550622/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study examines the role of the rule of law in fostering high-quality economic development in China, using data from 266 cities over the period 2003–2021. We construct a composite index of high-quality economic development through principal component analysis and capture the rule of law with a novel text-based index derived from annual government work reports using natural language processing. The findings reveal that stronger rule of law significantly promotes high-quality economic development, with the effects being particularly pronounced in core cities. Mechanism analysis shows that innovation serves as the primary channel, while entrepreneurship and net firm entry play negligible roles. These results underscore the critical role of the rule of law in advancing high-quality economic development and highlight the importance of strengthening legal institutions, especially in non-core cities, to achieve more balanced regional economic development.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eJEL Classification: \u003c/strong\u003eQ10, O31, P37\u003c/p\u003e","manuscriptTitle":"The Rule of Law Driven High-Quality Economic Development: Evidence from China","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-09-12 09:22:23","doi":"10.21203/rs.3.rs-7550622/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"06b4a5b5-339e-4f7a-8b98-77502da40322","owner":[],"postedDate":"September 12th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":54481889,"name":"Business and commerce/Economics"},{"id":54481890,"name":"Social science/Economics"},{"id":54481891,"name":"Social science/Social policy"}],"tags":[],"updatedAt":"2025-11-28T06:24:23+00:00","versionOfRecord":[],"versionCreatedAt":"2025-09-12 09:22:23","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-7550622","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-7550622","identity":"rs-7550622","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}