IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v86y2025icp1492-1509.html
   My bibliography  Save this article

Sustainability needs trust: The role of social trust in driving corporate ESG performance

Author

Listed:
  • Fan, Rui
  • Xu, Yuxuan
  • Yu, Liying
  • Qiu, Ran

Abstract

We study whether greater social trust is associated with better corporate environment, social and governance (ESG) performance. Employing data from Chinese listed companies between 2010 and 2022, this study observes the significantly positive effect of social trust on ESG performance, and there exists a complementary effect between social trust and legal environment. Mechanism examination reveals that social trust promotes ESG by enhancing public environmental concern and improving corporate compliance. Heterogeneity analysis reveals that the positive impact of social trust is more pronounced in regions with strong Confucian cultural atmosphere, firms facing fierce industry competition, and firms with low internal control quality. Moreover, social trust can strengthen the company’s ability to acquire resources from stakeholders and inhibit ESG greenwashing, which further supports social norm and network theory. Our research enriches studies regarding drivers of ESG performance from the informal institutional perspective and provides references for regulators in terms of ESG construction.

Suggested Citation

  • Fan, Rui & Xu, Yuxuan & Yu, Liying & Qiu, Ran, 2025. "Sustainability needs trust: The role of social trust in driving corporate ESG performance," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1492-1509.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:1492-1509
    DOI: 10.1016/j.eap.2025.05.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592625001730
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2025.05.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:1492-1509. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.