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How Courts Act as Institutional Actors in Governance: Strategic Adjudication in Embedded Courts

Published online by Cambridge University Press:  12 January 2026

Lingyan Yang
Affiliation:
Discipline Inspection and Supervision School, Shandong University, Weihai, China
Ke Jiang
Affiliation:
School of Economics, Shandong Normal University, Jinan, China
Fang Wang*
Affiliation:
Data Science Institute, Shandong University, Jinan, China
*
Corresponding author: Fang Wang; Email: wangfang226@sdu.edu.cn
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Abstract

“Embedded courts” explains how Chinese courts operate within the system of local bureaucratic organisation, raising concerns about how judges balance adjudicative functions with the expectations of local governance. Using 47,641 first-instance trademark judgments (2014–2021), we empirically examine adjudication in embedded courts and observe the following phenomenon: non-local plaintiffs are more likely to win but receive lower compensation; corporate defendants win more often yet face higher damages when they lose. Regional heterogeneity indicates that some courts exhibit lower support rates for local plaintiffs and well-known trademark holders. These findings reveal the strategic logic underlying local bureaucratic organisation. We develop a Judicial Behavior Index (JBI) and analyse Henan Province. The results suggest courts act as institutional actors responding to local governance incentives. By exercising discretion strategically, courts navigate local governance logics within the legal framework.

Information

Type
Research Article
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2026. Published by Cambridge University Press in association with Shanghai Jiao Tong University
Figure 0

Figure 1. Distribution of cases by province

Figure 1

Table 1. Control variable definitions

Figure 2

Table 2. Baseline regression results

Figure 3

Table 3. JBI in provinces

Figure 4

Figure 2. Provincial Trademark Registration Growth Heatmap (2010–2021). Data source: Trademark Office of the China National Intellectual Property Administration.

Figure 5

Table A. PSM estimation results under different matching methods

Figure 6

Table B. Robustness checks (Probit and Tobit)

Figure 7

Table C. Heterogeneity analysis by province: regression results for win (plaintiff success)

Figure 8

Table D. Heterogeneity analysis by province: regression results for compensation

Figure 9

Table E. Judicial Behavior Index (JBI)