IDEAS home Printed from https://ideas.repec.org/a/eee/teinso/v81y2025ics0160791x25000296.html

Assessing the ecology of cluster-based enterprise trust networks through percolation theory: Is your business environment trustworthy?

Author

Listed:
  • He, Guanghui
  • Zhou, Shicheng

Abstract

Since 2023, bank failures in America and Europe have reignited concerns about trust in credit transactions. During financial turbulence, heightened attention tends to be directed towards inter-enterprise trust management. However, existing studies have mainly focused on individual enterprise credit credibility, leaving a gap in analysing trust ecology within entire enterprise clusters. This study proposes an enterprise trust ecology assessment based on percolation theory. First, we established cluster-based enterprise trust networks (C-ETNs) and employed an entropy method to calculate the trust values of enterprise nodes. Subsequently, based on percolation theory, we mapped the trust ecology evolution to point percolation model to quantify trust ecology. Through simulations and data analysis of Chinese A-shares from 2007 to 2021, we uncovered a phase-transition phenomenon in trust ecology improvement. Trust in A-shares moderately improved, with business and comprehensive industry sectors as well as midland and west areas showing prominent improvement. However, overall trust ecology remained in early-phase transition, and almost all sectors and regions experienced upward bottlenecks. This study provides a new technical method for improving credit management in inter-enterprise transactions, thus enhancing market credit construction. Its extensive application is also valuable for economic and societal trust concerns.

Suggested Citation

  • He, Guanghui & Zhou, Shicheng, 2025. "Assessing the ecology of cluster-based enterprise trust networks through percolation theory: Is your business environment trustworthy?," Technology in Society, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:teinso:v:81:y:2025:i:c:s0160791x25000296
    DOI: 10.1016/j.techsoc.2025.102839
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0160791X25000296
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techsoc.2025.102839?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. Ayako Yasuda, 2005. "Do Bank Relationships Affect the Firm's Underwriter Choice in the Corporate‐Bond Underwriting Market?," Journal of Finance, American Finance Association, vol. 60(3), pages 1259-1292, June.
    2. Huang, Pingping & Jiao, Yuehua & Li, Sihai, 2022. "Impact of internal control quality on the information content of social responsibility reports: A study based on text similarity—Evidence from China," International Journal of Accounting Information Systems, Elsevier, vol. 45(C).
    3. Cliquet, Gérard & Guillo, Pierre-Alain, 2013. "Retail network spatial expansion: An application of the percolation theory to hard discounters," Journal of Retailing and Consumer Services, Elsevier, vol. 20(2), pages 173-181.
    4. Yu, Shu & Beugelsdijk, Sjoerd & de Haan, Jakob, 2015. "Trade, trust and the rule of law," European Journal of Political Economy, Elsevier, vol. 37(C), pages 102-115.
    5. Rebecca Boden & Salima Yassia Paul, 2014. "Creditable behaviour? The intra-firm management of trade credit," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 11(3), pages 260-275, September.
    6. Fernández, Marco A., 2005. "Condiciones generales de competencia en Panamá," Estudios y Perspectivas – Sede Subregional de la CEPAL en México 4957, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Katsaliaki, Korina & Kumar, Sameer & Loulos, Vasilis, 2024. "Supply chain coopetition: A review of structures, mechanisms and dynamics," International Journal of Production Economics, Elsevier, vol. 267(C).
    8. Ang, James S. & Cheng, Yingmei & Wu, Chaopeng, 2015. "Trust, Investment, and Business Contracting," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 50(3), pages 569-595, June.
    9. Theresa Krause & Mo Chen & Lena Wassermann & Doris Fischer & Jens Grossklags, 2023. "China's corporate credit reporting system: A comparison with the United States and Germany," Regulation & Governance, John Wiley & Sons, vol. 17(3), pages 755-771, July.
    10. Susan, Enyang Besong & Pan, Yanchun, 2024. "Trust as a determinant of green finance through information sharing and technological penetration: Integrating the moderation of governance for sustainable growth," Technology in Society, Elsevier, vol. 77(C).
    11. Qiu, Baoyin & Cheng, Bo, 2022. "Is a deleveraging policy effective? Evidence from China," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 471-480.
    12. Chen, Ji & Huang, Jiayan & Su, Weihua & Štreimikienė, Dalia & Baležentis, Tomas, 2021. "The challenges of COVID-19 control policies for sustainable development of business: Evidence from service industries," Technology in Society, Elsevier, vol. 66(C).
    13. Hajli, Nick & Sims, Julian, 2015. "Social commerce: The transfer of power from sellers to buyers," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 350-358.
    14. Oecd, 2005. "Next Generation Network Development in OECD Countries," OECD Digital Economy Papers 89, OECD Publishing.
    15. Michael Machokoto & Daniel Gyimah & Boulis Maher Ibrahim, 2022. "The evolution of trade credit: new evidence from developed versus developing countries," Review of Quantitative Finance and Accounting, Springer, vol. 59(3), pages 857-912, October.
    16. Rebecca Boden & Salima Yassia Paul, 2014. "Creditable behaviour? The intra-firm management of trade credit," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 11(3), pages 260-275, September.
    17. Cheng, Chao & Yang, Liu, 2022. "What drives the credit constraints faced by Chinese small and micro enterprises?," Economic Modelling, Elsevier, vol. 113(C).
    18. Bahadır Karakoç, 2024. "Trade credit and corporate investment: enhancing value creation," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 29(3), pages 1388-1417, July.
    19. Wang, Lei & Li, Shouwei & Wu, Chaoqun, 2019. "Risk contagion in inter-firm credit guarantee network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 526(C).
    20. Wu, Wenfeng & Firth, Michael & Rui, Oliver M., 2014. "Trust and the provision of trade credit," Journal of Banking & Finance, Elsevier, vol. 39(C), pages 146-159.
    21. Kejing Chen & Wenqi Guo & Yanling Kang & Jing Wang, 2022. "Does the Deleveraging Policy Increase the Risk of Corporate Debt Default: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(3), pages 601-613, February.
    22. He, Zhongda & Suardi, Sandy & Wang, Kai & Zhao, Yang, 2022. "Firms’ COVID-19 Pandemic Exposure and Corporate Cash Policy: Evidence from China," Economic Modelling, Elsevier, vol. 116(C).
    23. Ding, Zhujun & Au, Kevin & Chiang, Flora, 2015. "Social trust and angel investors' decisions: A multilevel analysis across nations," Journal of Business Venturing, Elsevier, vol. 30(2), pages 307-321.
    24. Lim, Sokchea & Morshed, AKM Mahbub & Khun, Channary, 2018. "Trust and macroeconomic performance: A two-step approach," Economic Modelling, Elsevier, vol. 68(C), pages 293-305.
    25. Zhao, Jianyu & Yu, Lean & Xi, Xi & Li, Shengliang, 2023. "Knowledge percolation threshold and optimization strategies of the combinatorial network for complex innovation in the digital economy," Omega, Elsevier, vol. 120(C).
    26. Kim, Peter H. & Cooper, Cecily D. & Dirks, Kurt T. & Ferrin, Donald L., 2013. "Repairing trust with individuals vs. groups," Organizational Behavior and Human Decision Processes, Elsevier, vol. 120(1), pages 1-14.
    27. Wei Cui, 2017. "Social Trust, Institution, and Economic Growth: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(6), pages 1243-1261, June.
    28. Christian Bjørnskov, 2012. "How Does Social Trust Affect Economic Growth?," Southern Economic Journal, John Wiley & Sons, vol. 78(4), pages 1346-1368, April.
    29. Zhukov, Dmitry & Khvatova, Tatiana & Lesko, Sergey & Zaltcman, Anastasia, 2018. "Managing social networks: Applying the percolation theory methodology to understand individuals' attitudes and moods," Technological Forecasting and Social Change, Elsevier, vol. 129(C), pages 297-307.
    30. Dennis Huisman & Raf Jans & Marc Peeters & Albert P.M. Wagelmans, 2005. "Combining Column Generation and Lagrangian Relaxation," Springer Books, in: Guy Desaulniers & Jacques Desrosiers & Marius M. Solomon (ed.), Column Generation, chapter 0, pages 247-270, Springer.
    31. Stauffer, D. & Jan, N., 2000. "Sharp peaks in the percolation model for stock markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 277(1), pages 215-219.
    32. Timothy C. Earle, 2009. "Trust, Confidence, and the 2008 Global Financial Crisis," Risk Analysis, John Wiley & Sons, vol. 29(6), pages 785-792, June.
    33. Mariassunta Giannetti & Mike Burkart & Tore Ellingsen, 2011. "What You Sell Is What You Lend? Explaining Trade Credit Contracts," The Review of Financial Studies, Society for Financial Studies, vol. 24(4), pages 1261-1298.
    34. Kanai, Yasuhiro & Abe, Keiji & Seki, Yoichi, 2015. "Price percolation model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 427(C), pages 226-233.
    35. Goldenberg, J & Libai, B & Solomon, S & Jan, N & Stauffer, D, 2000. "Marketing percolation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 284(1), pages 335-347.
    36. Pedro J. García†Teruel & Pedro Martínez†Solano, 2010. "A Dynamic Approach to Accounts Receivable: a Study of Spanish SMEs," European Financial Management, European Financial Management Association, vol. 16(3), pages 400-421, June.
    37. Gérard Cliquet & Pierre-Alain Guillo, 2013. "Retail network spatial expansion: An application of the percolation theory to hard discounters," Post-Print halshs-00773446, HAL.
    38. Andrew Metrick, 2024. "The Failure of Silicon Valley Bank and the Panic of 2023," Journal of Economic Perspectives, American Economic Association, vol. 38(1), pages 133-152, Winter.
    39. Shuang Jin & Wei Wang & Zilong Zhang, 2023. "The Real Effects of Implicit Government Guarantee: Evidence from Chinese State-Owned Enterprise Defaults," Management Science, INFORMS, vol. 69(6), pages 3650-3674, June.
    40. Levine, Ross & Lin, Chen & Xie, Wensi, 2018. "Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 53(4), pages 1441-1477, August.
    41. Yvonne Brunetto & Rod Farr‐wharton, 2007. "The Moderating Role of Trust in SME Owner/Managers' Decision‐Making about Collaboration," Journal of Small Business Management, Taylor & Francis Journals, vol. 45(3), pages 362-387, July.
    42. Devesh Roy & Abdul Munasib & Xing Chen, 2014. "Social trust and international trade: the interplay between social trust and formal finance," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(4), pages 693-714, November.
    43. Capaldo, Antonio & Giannoccaro, Ilaria, 2015. "How does trust affect performance in the supply chain? The moderating role of interdependence," International Journal of Production Economics, Elsevier, vol. 166(C), pages 36-49.
    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. Zhou, Huan & Guo, Yilin & Li, Yu, 2025. "Cross-border e-commerce business environment evaluation for Chinese provinces using a combined Entropy-TOPSIS approach," Evaluation and Program Planning, Elsevier, vol. 112(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. Ndubuisi, Gideon & Konte, Maty, 2019. "Credit constraints and trade performance: Does trust-based social capital matter?," MERIT Working Papers 2019-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Nieves Lidia Díaz-Díaz & Pedro J. García-Teruel & Pedro Martínez-Solano, 2025. "Trade credit and family control," Review of Managerial Science, Springer, vol. 19(8), pages 2529-2568, August.
    3. Panagiota Makrychoriti & Fotios Pasiouras & Menelaos Tasiou, 2022. "Financial stress and economic growth: The moderating role of trust," Kyklos, Wiley Blackwell, vol. 75(1), pages 48-74, February.
    4. Chen, Xuchang & Zhang, Zhu, 2025. "Fintech development and corporate misconduct," Technological Forecasting and Social Change, Elsevier, vol. 213(C).
    5. DeWitt, William S. & Evans, Steven N. & Hiesmayr, Ella & Hummel, Sebastian, 2024. "Mean-field interacting multi-type birth–death processes with a view to applications in phylodynamics," Theoretical Population Biology, Elsevier, vol. 159(C), pages 1-12.
    6. Amore, Mario Daniele & Epure, Mircea, 2021. "Riding out of a financial crisis: The joint effect of trust and corporate ownership," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 92-109.
    7. Song, Gaoya & Li, Quan, 2025. "Big data in tax enforcement and trade credit: Evidence from China," Research in International Business and Finance, Elsevier, vol. 76(C).
    8. James, Hui Liang & Ngo, Thanh & Wang, Hongxia, 2023. "The impact of more able managers on corporate trade credit," Journal of Behavioral and Experimental Finance, Elsevier, vol. 40(C).
    9. Xiao, Zhongyi & Li, Yuanling & Xiang, Cheng, 2025. "Do suppliers value customer firms' digital transformation? Evidence from trade credit provision," International Review of Financial Analysis, Elsevier, vol. 99(C).
    10. Stefano Filomeni & Michele Modina & Elena Tabacco, 2023. "Trade credit and firm investments: empirical evidence from Italian cooperative banks," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 1099-1141, April.
    11. Fonseka, Mohan & Richardson, Grant, 2025. "Are entrepreneurial and managerial trust and banks' risk-taking behavior related? Empirical evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 91(C).
    12. Kyiu, Anthony & Tawiah, Bernard & Boasiako, Kwabena Antwi & Adasi Manu, Sylvester, 2025. "Reprint of: Third-party auditor liability risk and trade credit policies," The British Accounting Review, Elsevier, vol. 57(1).
    13. Li, Qian & Wang, Shihao & Song, Victor, 2023. "Product competition, political connections, and the costs of high leverage," Journal of Empirical Finance, Elsevier, vol. 74(C).
    14. Zhu, Bo & Wang, Yansen, 2024. "Does social trust affect firms' ESG performance?," International Review of Financial Analysis, Elsevier, vol. 93(C).
    15. Ben-Nasr, Hamdi & Masry, Shadin & Masum, Abdullah-Al & Ouni, Zeineb, 2025. "Carbon risk and trade credit," International Review of Economics & Finance, Elsevier, vol. 103(C).
    16. Yu, Lin & Ye, Jiahui & Yang, Lin, 2025. "From endowed trust to earned trust: Firms located in trusted regions," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    17. Bai, Min & Cai, Jifu & Qin, Yafeng, 2021. "Ownership discrimination and private firms financing in China," Research in International Business and Finance, Elsevier, vol. 57(C).
    18. Xiangyu Chen & Peng Wan, 2020. "Social trust and corporate social responsibility: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 485-500, March.
    19. Chen, Shihua & Han, Xu & Jebran, Khalil, 2020. "Social trust environment and tunneling," Journal of Contemporary Accounting and Economics, Elsevier, vol. 16(3).
    20. Vuong Thao Tran & Van Hoang Vu & Anh Le & Dinh Hoang Bach Phan, 2024. "Does it pay to treat employees well?: The case of informal finance," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 51(1-2), pages 473-510, January.

    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:teinso:v:81:y:2025:i:c:s0160791x25000296. 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: https://www.journals.elsevier.com/technology-in-society .

    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.