IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v83y2025ics1544612325009109.html

Social trust, financial constraints, and enterprise information disclosure

Author

Listed:
  • Cao, Yanming
  • Xue, Yonggang
  • Tan, Yichu

Abstract

Based on data from China's A-share listed firms between 2014 and 2023, this study empirically examines the impact of social trust on corporate information disclosure quality and its underlying mechanisms. The findings reveal that regional social trust significantly enhances firms' information disclosure quality. Further analysis demonstrates that financial constraints play a partial mediating role in the relationship between social trust and disclosure quality: Social trust mitigates financing constraints by strengthening firms' willingness to provide information and reputational constraints, thereby incentivizing greater resource allocation to optimize disclosure practices. This creates a virtuous cycle of "trust-financing-disclosure." Heterogeneity analysis shows that state-owned enterprises (SOEs) exhibit stronger sensitivity to social trust, with their disclosure quality being significantly more responsive to social trust than private enterprises. This disparity is attributed to SOEs' stronger collectivist interest orientation and reputational mechanisms.

Suggested Citation

  • Cao, Yanming & Xue, Yonggang & Tan, Yichu, 2025. "Social trust, financial constraints, and enterprise information disclosure," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009109
    DOI: 10.1016/j.frl.2025.107651
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325009109
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.107651?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Xiao, Ming & Chen, Ning, 2025. "How does social trust promote enterprises' financialization?," International Review of Financial Analysis, Elsevier, vol. 97(C).
    2. Xie, Heng & Cui, Xieyuan & Cao, Nannan & Guo, Zhouqi & Zhang, Qianchuan, 2024. "Social trust and the cost of equity," Finance Research Letters, Elsevier, vol. 63(C).
    3. Zan, Haocheng & Jiang, Kailin & Ma, Jing, 2024. "Social trust, green finance, and enterprise innovation," Finance Research Letters, Elsevier, vol. 63(C).
    4. Kong, Dongmin & Piao, Yin & Zhang, Wenzhe & Liu, Chenhao & Zhao, Ying, 2023. "Trust and corporate social responsibility: Evidence from CEO’s early experience," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 585-596.
    5. Zhongju Liao & Mengnan Zhang, 2024. "Regulatory distance and firms' environmental innovation: The role of environmental information disclosure and social trust," Business Strategy and the Environment, Wiley Blackwell, vol. 33(6), pages 5529-5539, September.
    6. Maung, Min, 2024. "The bright side of social trust and entrepreneurial finance," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 778-795.
    7. Gu, Leilei & Liu, Zhongyang & Ma, Sichao & Wang, Hongyu, 2022. "Social trust and corporate financial asset holdings: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 82(C).
    8. Shi, Lisi & Ho, Kung-Cheng & Liu, Ming-Yu, 2023. "Does societal trust make managers more trustworthy?," International Review of Financial Analysis, Elsevier, vol. 86(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Huang, Shuai & Pan, Dongliang & Zhong, Shengyang & Cao, Zhenxiang, 2025. "Corporate disclosure quality and financing constraints: Evidence from chinese listed companies," International Review of Financial Analysis, Elsevier, vol. 107(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Kelin & Li, Changlin & Xiang, Yanlin & Jia, Xiaozhuang, 2025. "Drivers of corporate governance: The impact of social trust and investment efficiency," International Review of Financial Analysis, Elsevier, vol. 108(PA).
    2. Xiao, Ming & Chen, Ning, 2025. "How does social trust promote enterprises' financialization?," International Review of Financial Analysis, Elsevier, vol. 97(C).
    3. Zhao, Xiaoke & Li, Huirong & Liu, Shengtao, 2025. "The power of credit: can the implementation of a social credit system reduce the risk of corporate debt default?," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 749-763.
    4. Wang, Menghan & Zhang, Yinglin & Gong, Xiaoxiao, 2025. "The impacts of social credit environment improvement on corporate ESG greenwashing: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 102(C).
    5. Zhu, Bo & Wang, Yansen, 2024. "Does social trust affect firms' ESG performance?," International Review of Financial Analysis, Elsevier, vol. 93(C).
    6. Gao, Xing & Lai, Xiaobing & Huang, Ting & Lai, Huisu, 2024. "Does social dishonesty accelerate corporate maturity mismatch of investment and financing?," Finance Research Letters, Elsevier, vol. 64(C).
    7. Wang, Jianye & Ke, Yubing, 2025. "“Fidelity” or “exploitation”: Social trust and corporate greenwashing," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 336-350.
    8. Wei, Qingfang & Liu, Yuan & Cai, Weixing & Wan, Jiangtao, 2025. "Open government data and personal default: Evidence from China," Journal of Asian Economics, Elsevier, vol. 100(C).
    9. Liu, Shasha & Wu, Yuhuan & Kong, Gaowen, 2024. "Politics and Robots," International Review of Financial Analysis, Elsevier, vol. 91(C).
    10. Wang, Pengcheng & Yang, Xuelin, 2024. "Social trust and household financial decision-making: An empirical study based on the usage of household financial technology," Finance Research Letters, Elsevier, vol. 70(C).
    11. Zhou, Taiyun & Liu, Mingxuan & Zhang, Xiyu & Qi, Zheng & Qin, Ni, 2024. "Does institutional ownership affect corporate social responsibility? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 84-98.
    12. Lina Mao & Guangfan Sun & Yining He & Huixia Chen & Changwei Guo, 2024. "Culture and Sustainability: Evidence from Tea Culture and Corporate Social Responsibility in China," Sustainability, MDPI, vol. 16(10), pages 1-17, May.
    13. Xie, Heng & Cui, Xieyuan & Cao, Nannan & Guo, Zhouqi & Zhang, Qianchuan, 2024. "Social trust and the cost of equity," Finance Research Letters, Elsevier, vol. 63(C).
    14. Yang, Yingjun & Cheng, Lihong & Ni, Lin & Xu, Xin, 2025. "Debt financing costs, patient capital, and the resilience of real estate enterprises," Finance Research Letters, Elsevier, vol. 83(C).
    15. Wang, Yidi & Gu, Hongmei, 2024. "Impacts of trust on the cost of debt financing: The perspectives of in-group trust and out-group trust," Finance Research Letters, Elsevier, vol. 62(PA).
    16. Wu, Shilei & Zhou, Fu-You & Si, Deng-Kui & Hao, Jiawei, 2025. "Does ESG rating policy reduce corporate risk-taking? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    17. Guo, Yu & Li, Jie & Liu, Fengyuan & Li, Jianjun, 2025. "Law enforcement quality and venture capital Efficiency: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 103(C).
    18. Ma, Anmiao, 2024. "The role of management characteristics in trade frictions and corporate financialization," Finance Research Letters, Elsevier, vol. 65(C).
    19. Xiong, Mengxu & Liu, Chen & Xiang, Junyi, 2024. "How financial derivatives affect energy firms' ESG," Energy Economics, Elsevier, vol. 140(C).
    20. Ouyang, Yuming, 2025. "Social insurance contribution rates, income levels, and corporate innovation," Finance Research Letters, Elsevier, vol. 74(C).

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:finlet:v:83:y:2025:i:c:s1544612325009109. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.elsevier.com/locate/frl .

    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.