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Can the improvement of the social credit environment promote cross-regional investment of listed companies?

Author

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  • Zhang, Jianhua
  • Cui, Aixia

Abstract

This paper takes Shanghai and Shenzhen A-share listed companies from 2012 to 2023 as a sample to explore the impact and mechanisms of the improvement in the social credit environment on firms' cross-regional investment. The research indicates that the improvement in the social credit environment significantly promotes firms' cross-regional investment by reducing transaction uncertainties and information asymmetry risks between firms, cutting transaction costs, and enhancing firms' confidence in cross-regional investment. Further analysis of the mediating effect reveals that the improvement in the social credit environment facilitates firms' cross-regional investment by reducing both internal and external transaction costs. Heterogeneity analysis shows that this policy mainly promotes cross-regional investment by non-state-owned enterprises, with an insignificant impact on state-owned enterprises.

Suggested Citation

  • Zhang, Jianhua & Cui, Aixia, 2025. "Can the improvement of the social credit environment promote cross-regional investment of listed companies?," Finance Research Letters, Elsevier, vol. 85(PD).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pd:s1544612325014801
    DOI: 10.1016/j.frl.2025.108225
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    References listed on IDEAS

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    1. Yang, Xin & Zhang, Jiatong & Lin, Xian & Zhang, Yun, 2025. "Escaping the gavel: How environmental courts drive firms' cross-regional investment," International Review of Financial Analysis, Elsevier, vol. 108(PB).

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