Does social trust enhance firm engagement in supply chain finance?

Tianlin Liu and Bing Zhang

Finance Research Letters, 2025, vol. 78, issue C

Abstract: This paper examines the impact of social trust on listed firms’ engagement in supply-chain finance. Using text analysis method to measure supply-chain finance (SCF) engagement extent of firm, we find that social trust can enhance firms’ engagement in SCF. Furthermore, the mitigation of agency cost is an important mechanism. In heterogeneity analysis, we find the enhancement effect of social trust on SCF is more significant in companies with lower quality of law institutions and higher financing constraints.

Keywords: Supply-chain finance; Social trust; Informal institution; Financing constraints (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325004155

DOI: 10.1016/j.frl.2025.107152

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