Social credit system construction and corporate debt dilemmas

Abstract

The social credit system plays a positive role in promoting the flow of social resources and enhancing economic efficiency. This paper treats the implementation of the tax credit rating system as an external shock event in the social credit system construction, designing a quasi-natural experiment to empirically test the impact of the social credit system construction on corporate debt dilemmas. The research finds that the construction of the social credit system can effectively alleviate the debt predicaments of enterprises. Further heterogeneity tests indicate that our findings are more pronounced in private enterprises and those without political connections.