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Social credit system construction and corporate rent-seeking: Evidence from China

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  • Liu, Peng
  • Shen, Jianfei
  • Li, Hualong

Abstract

Existing research lacks empirical evidence on whether the construction of the social credit system (SCS) curbs corporate rent‑seeking. This study uses Chinese A‑share firms (2010–2023), treating the phased rollout of “SCS Construction Model Cities” (Credit model cities) as a quasi‑natural experiment and applying a multi‑period difference‑in‑differences (DID) design. Results show SCS construction significantly reduces corporate rent‑seeking, robust to various checks. Mechanism tests indicate SCS acts by improving the information environment and enhancing market competition. Corporate digital transformation positively moderates this effect. Heterogeneity analysis finds stronger effects in regions with weak institutions (low fiscal transparency, low innovation capacity). The study provides a theoretical perspective on how formal institutions curb corporate rent‑seeking in the digital era.

Suggested Citation

  • Liu, Peng & Shen, Jianfei & Li, Hualong, 2026. "Social credit system construction and corporate rent-seeking: Evidence from China," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326001054
    DOI: 10.1016/j.frl.2026.109574
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