How does social trust promote enterprises' financialization?

Ming Xiao and Ning Chen

International Review of Financial Analysis, 2025, vol. 97, issue C

Abstract: Using data from A-share listed companies from 2011 to 2022, this paper uses the two-way fixed effects technique to investigate the relationship between social trust and corporate financialization. The finding shows that implementing regional social trust can help the business financialization process faster. Reducing cash dividends, improving managers' incentive to seek remuneration, and easing financing restrictions also help to generate stimulating advantages. Moreover, the degrees of internal control and external governance of the companies have different effects on mediation. This study's findings help us better grasp a society's unique qualities and effectiveness marked by confidence. Furthermore, it underlined the need to use its internalized value to create positive interactions between the institutional environment and corporate investment, promoting a fairer real economy and finance growth.

Keywords: Social trust; Enterprises financialization; Cash dividends; Managers' compensation-seeking motivation; Financing constraints (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:97:y:2025:i:c:s1057521924007518

DOI: 10.1016/j.irfa.2024.103819

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