Corporate financial digitalization, internal governance, and social trust

Yan Liu, Zhongyin Tang and Wei Shao

Finance Research Letters, 2024, vol. 70, issue C

Abstract: Taking advantage of a comprehensive sample of China's A-share listed companies from 2012 to 2022, this research examines the relationship between Corporate financial digitalization and a society's trust in firms. We provide robust evidence that the level of financial digitalization is positively related to social trust. Moreover, we document that the positive relationship is more pronounced for firms with effective internal governance because it can mitigate conflicts of interests between insiders and outsiders. Our findings are robust to a battery of sensitivity tests. Overall, this research contributes to the fast-growing literature on financial digitalization and social trust as well as provides valuable practical implications for investors, managers, and policymakers.

Keywords: Financial digitalization; Internal governance; Trust; Transparency (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324013242

DOI: 10.1016/j.frl.2024.106295

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