| Abstract | The Chinese economic institution is characterized as regionally decentralized authoritarian system (Xu, 2010), and it leads serious local market fragmentation. Theoretically, judicial checks and balances are seen as crucial guarantees of property right and contract freedom, and of which judicial independence is a main way. Consequently, judicial independence couldn’t only break the market fragmentation, but also won’t break the equilibrium institutions which inspirit local government developing economy. This paper takes the geographical rotation of chief justices of higher people’s court as a quasi-experiment to reveal the promotion of judicial independence in China, and finds that: the geographical rotation of chief justices of higher people’s court significantly and considerably reduces the market fragmentation, and significantly boosts economic growth as well. It means judicial independence is also an important way to guarantee property right and contract freedom in China. |