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How social credit affects enterprise innovation: Evidence from the development of China's social credit system

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  • Guo, Shulong
  • Wang, Yongqiang
  • Liu, Yubin

Abstract

Technological innovation is the fundamental driving force for economic growth, and a conducive institutional environment is the foundation for fostering technological innovation. As a new social mechanism, China's Social Credit System (SCS) is significant in promoting enterprise innovation by institutionalizing informal institutions-social trust. Adopting the data of Chinese listed enterprises from 2011 to 2019 and a staggered difference-in-difference method, this study employs the policy of SCS demonstration cities as a quasi-natural experiment to quantitatively analyze the effect of SCS on enterprise innovation and its influencing mechanisms. The finding reveals that institutionalizing social trust through the SCS can significantly promote enterprise innovation. The promoting effect of SCS on enterprise innovation is achieved by facilitating enterprise credit financing, promoting enterprise cooperation, and optimizing government resource allocation. Moreover, the promoting effect of SCS on enterprise innovation is significant in cities with high marketization and informatization. The effect also exists in the adjacent cities of the SCS pilot policy, that is, SCS has spillover effects on enterprise innovation. This study is helpful not only for enterprise decision-makers to better strengthen credit management and accelerate enterprise innovation, but also for government policymakers to improve SCS, optimize the business environment and promote enterprise innovation.

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  • Guo, Shulong & Wang, Yongqiang & Liu, Yubin, 2025. "How social credit affects enterprise innovation: Evidence from the development of China's social credit system," Technological Forecasting and Social Change, Elsevier, vol. 213(C).
    • Handle: RePEc:eee:tefoso:v:213:y:2025:i:c:s0040162525000381
    DOI: 10.1016/j.techfore.2025.124007
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    More about this item

    Keywords

    Social credit; Enterprise innovation; Difference-in-difference; Spillover effect;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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