High Levels Of Social Trust Research Articles

Does the Confucianism in audit firms enhance the corporate ESG Disclosure?

This paper examines the role of Confucian culture characterized by traditional virtues such as benevolence, righteousness, propriety, wisdom, and trust in audit firms and corporate ESG disclosure. Using data from Chinese A-share listed companies from 2008 to 2021, we found that Confucian culture in audit firms significantly promotes the level of corporate ESG disclosure. We also tested the moderating effect of regional culture and corporate culture, and found that in regions with stronger merchant guild culture and higher levels of social trust, as well as in companies with a stronger culture of integrity and cooperation, the promotion effect of Confucian culture in audit firms on corporate ESG disclosure is more pronounced. Furthermore, we discovered that the closer the geographical distance between audit firms and client companies, the greater the positive impact of Confucian culture in audit firms on corporate ESG disclosure. Overall, this study reveals the modern value of Confucian traditional culture for the improvement of enterprises’ environmental friendly behaviors from the perspective of external audit, and highlighted the relevance of informal institutions in corporate governance.

Everything for the people, but trust? Exploring the link between populist attitudes and social trust in Italy, Portugal, and Spain

AbstractWhile it is largely unquestioned that populist individuals are more likely to distrust politics and politicians, the empirical association between populist attitudes and social trust is far less clear. In principle, the people‐centrist component of populism could trigger higher levels of social trust among individuals with stronger populist attitudes. Empirically, however, the relationship seems more complex and could be influenced by the boundaries of the group identified as ‘the people’. This paper examines this association using data from three South European countries: Italy, Portugal, and Spain. The main results show that stronger populist attitudes correlate with lower levels of generalized social trust but with higher levels of trust towards the group identified with ‘the people’. These results underline the conceptual consistence of populist attitudes and help to theorize about the effects of widespread populist attitudes.

Social Credit System: A Discussion about the Utility of Chinese Digital Project in a European Union Settings

The Social Credit System (SCS, 社会信用体系, shèhuì xìnyòng tĭxì), is an extremely interesting, ultimately nationwide pilot project, consisting of establishing the system of social rating, which, based on data collected over decades and stored both analog and with the use of state-of-the-art technologies will create profiles of citizens and businesses in the People’s Republic of China. The system focuses on four main spheres – national enterprises and economy, society, the judiciary, and public administration. It is in them that a higher level of social trust and security will be ensured, law regulations better observed, corruption eliminated, and proper transparency guaranteed. In analyzing the issue of the Western world’s attitude to the mechanism of digital surveillance and control of business and social activity in China, I should seek answers to the following questions, intriguing from the cognitive and practical perspective: Which of the above interpretations seems to be closer to the truth?; can the SCS have, at least partially, a universal character in the European Union, especially in the societies with a different system of values and the countries with a different political system than the one of the PRC?

Not all supply chains are created equal: The linkages between soy local trade relations and development outcomes in Brazil

Global agricultural trade is a key driver of socioenvironmental transformations in rural areas, including development dynamics. By creating revenue and wealth opportunities, it influences the economic and social relations in a landscape. However, not all landscapes shaped by a given agricultural sector are the same: one variable is how supply chain actors and their embedded networks (including commodity traders, farmers, and input suppliers) develop, maintain, or shift relationship patterns over time. To explore the connections between development and the nature of such trade relationships, particularly between farmers and commodity traders, we take soy as an emblematic example and compare four different municipalities in Brazil. The contrasting cases are Passo Fundo (RS), an old soy-growing area in Brazil’s South, in a consolidated agricultural region with relatively persistent relationships between farmers and commodity traders; Sorriso (MT), in a more recently occupied agricultural region in the country’s Center-West, with relatively low persistence of supply-chain relations; Balsas (MA), a place with persistent supply-chain relations in the so-called Matopiba agricultural expansion frontier; and Bom Jesus (PI), also a frontier municipality but having less persistent relations. We build on quantitative assessments of supply-chain stickiness in those four municipalities, which is understood as the persistence of those commercial relationships in contrast to volatility. Analyzing qualitative data collected through over 30 field interviews with local actors, we show how soy supply-chain relations significantly differ across places. We distinguish them particularly in terms of lock-in effects on farmers and level of trust. Crucially, our findings identify supplier cooperatives as key mediating institutions in the supply chain, counterbalancing the power of commodity traders over farmers. Such cooperatives are also associated with more equitable development outcomes. Yet, they require high levels of social trust and distribute wealth primarily within the sector, leaving other farmers excluded.

Does Confucian culture affect shadow banking activities? Evidence from Chinese listed companies

The study investigates whether and how cultural norms affect corporate shadow banking activities. Using a sample of Chinese listed companies from 2008 to 2020, we find that as a typical informal institution, Confucian culture has a positive effect on stimulating shadow banking business. Mechanism tests show that Confucianism contributes to mitigating business risks and facilitating integration into social networks to tap more profit opportunities, thus stimulating firms to engage in shadow banking activities. Moreover, the positive association between Confucianism and the amount of corporate shadow banking is more prominent for firms located in regions with higher levels of social trust, stronger regional collectivism, and weaker foreign cultural shocks. Our findings are robust to alternative measures of key variables and are still valid after controlling for the endogeneity issues. This study contributes to the literature on the determinants of corporate shadow banking activities and highlights the role of cultural norms in firm’s decision-making.

Top management team stability and corporate default risk: The moderating effects of industry competition and strategic deviance

AbstractThis study takes Chinese A‐share listed firms from 2007 to 2020 as samples to examine the impact of top management team (TMT) stability on corporate default risk. The research findings reveal that TMT stability significantly mitigates corporate default risk. Furthermore, industry competition significantly strengthens the inhibitory effect of TMT stability on corporate default risk, while strategic deviance notably weakens this inhibitory effect. Heterogeneity analysis results indicate that the inhibitory effect of TMT stability on default risk is more pronounced for non‐state‐owned enterprises, firms situated in regions with higher levels of social trust, and during periods of elevated economic policy uncertainty.

Foreign subsidiary performance: social trust–entry fit

PurposeThis paper aims to study whether the adoption of an entry mode that fits the social trust level contributes to the improvement of foreign subsidiary performance.Design/methodology/approachThe authors used the Probit model, linear regression, strategic fit approach and instrumental variable regression. The sample was made up of 11,095 observations of Chinese multinational enterprises' foreign subsidiaries in 54 countries from 2005 to 2020.FindingsThe results suggest that a host country with a high level of social trust results in fewer difficulties for enterprises in gaining legitimacy, thus foreign subsidiaries are more likely to select the wholly owned entry mode. The results also show that the effect is contingent on the formal institutions of host countries. The results of the mechanism test suggest that social trust influences subsidiaries' entry mode choice by reducing information asymmetry, costs and uncertainty risks. This study further finds that selecting a fit entry mode based on social trust level substantially increases foreign subsidiary performance and this effect is more significant when multinational enterprises (MNEs) are state-owned enterprises (SOEs).Research limitations/implicationsThe main limitation of this paper is its only focus on foreign subsidiaries of Chinese MNEs, which may limit the generalizability of research findings.Originality/valueThis paper responds to the call for conducting more research on informal institutions. Findings highlight the critical role of informal institutions in helping foreign subsidiaries in gaining legitimacy in host countries and the essentialness of selecting a fit entry mode based on the informal institutions of host countries for the development of foreign subsidiaries.

Can social trust promote the professional division of labor in firms? Evidence from China

The informal institution of social trust has a crucial impact on economic activities. Based on social learning theory and social network theory, this study investigates the impact of social trust on the participation of firms in the professional division of labor. We find that firms in areas with a high level of social trust are more inclined to participate in the professional division of labor. Our results are robust to various measures of social trust and the professional division of labor, and are also robust after using the two-stage least-squares (2SLS) method to control for potential endogeneity. The mechanism analysis demonstrates that social trust can promote firms to participate in the professional division of labor by reducing search and contract costs. Further analyses show that social trust can improve total factor productivity (TFP) by promoting firms to participate in the professional division of labor, and that if the formal legal system cannot effectively protect the rights and interests of firms, social trust can play a substituting role.

Institutional reforms and social trust: Quasi-experimental evidence from the Caucasian states

I study the effect of institutional quality on social trust. As a source of exogenous variation, I consider the natural experiment of institutional reforms in the post-Soviet nation of Georgia following the 2003 Rose Revolution. I examine the level of social trust among Armenians and Azeris, the two ethnic groups that were largely uninvolved in the revolutionary events, and whose homelands have been partitioned between Georgia, Armenia, and Azerbaijan by the arbitrarily drawn boundaries inherited from the Soviet era. I show that people who were exposed to post-revolutionary Georgian institutions have higher levels of social trust. They also have higher levels of confidence in state institutions, but not higher intragroup cohesion. My findings suggest that improvement in institutional quality is important in fostering social trust.

The impact of social trust on loan grants and default risk: Evidence from China’s regional commercial banks during branching policy changes

We investigate the impact of social trust on loan grants and default risk among regional commercial banks in China by using exogenous shocks stemming from the unique regulatory reforms of bank branch deregulation and re-regulation. We find that social trust has different impacts during the two periods. In particular, banks located in regions with higher levels of social trust exhibit a more pronounced increase (decrease) in loan grants following deregulation (re-regulation). We also find a stronger positive relationship between social trust and default risk after deregulation and re-regulation. Our results highlight the relevance of changes in banking regulation for the impact of social trust on loan grants and default risk. They also provide valuable insights for banking regulators and bank managers in evaluating the outcomes of banking regulation reforms.

Green side of informal institutions: Social trust and environmental sustainability

AbstractInformal institutions are found to shape the behaviors of economic organizations within the business world by creating localized social norms and moral commitments. However, the existing literature pays greater attention to the financial consequences of such institutions, and little is known about their environmental impacts, especially in the context of transition economies. By linking institutional theory with environmental strategy literature, in this study, we develop a theoretical framework and empirically test how social trust, one of the dimensions of informal institutions, influences corporate environmental responsibility. Using a longitudinal data set of Chinese listed firms from 2006 to 2015, we find support that firms located in regions with a higher level of social trust engage in more environmental responsibility activities. We also show that this effect is more pronounced when local environmental protests are fewer and information transparency is worse. Our findings highlight the importance of social trust in environmental governance and provide evidence of how it serves as a substitute for formal environmental institutions in transition economies.

A cross-national study of entrepreneurial intent: the contextual effect of social trust and trust in government

This multilevel, cross–national study examines the influence of social trust and trust in government on latent entrepreneurs’ intention to start a business. Building upon the theory of institutional hierarchy and social relations, this research shows that the negative impact of fear of business failure on entrepreneurial intention varies across countries. Results indicate that such a negative relationship is weaker in countries with higher levels of social trust and trust in government. In other words, in a trusting environment, a sense of uncertainty and lack of control of start–up issues may be mitigated by conflict compromise and efficient exchange of information among agents. Such understanding has profound academic, policy and business implications in both developing and developed nations.

Dreamworld or Dystopia?: The Nordic Model and Its Influence in the 21st Century

Dreamworld or Dystopia?: The Nordic Model and Its Influence in the 21st Century

Current Situation and Influencing Factors of Residents' Social Trust

The issue of social trust has been concerned by people throughout the ages, a higher social trust will often promote the development of the country, social harmony. By using literature analysis and questionnaire method and using the data of 2015 China comprehensive Social survey, Descriptive statistics and multiple linear regression analysis were conducted on 7676 valid questionnaires from urban and rural residents in China.on the basis of previous studies, social trust is divided into universal trust, in-circle trust and out-circle trust, to discuss the current situation of social trust and empirically analyze the influencing factors. The results show that the general trust level of the residents and the trust level in the circle is above the medium level, They tend to trust groups with blood and geographical relationship with themselves;while the trust level outside the circle is low, and the social trust level of Chinese residents needs to be improved. From the perspective of influencing factors, The frequency and familiarity of communication with others have a significant impact on and a positive correlation with the three types of trust;frequent and familiar social contacts, sense of justice and happiness in social attitudes, education level and economic level all have a positive effect on social trust. The more people think that life is happy and happy, the easier it is to trust others.Residents living in towns and townships have a higher level of social trust than those living in cities.

Trade Credit and Firm Efficiency: Evidence from Chinese Manufacturing Firms

ABSTRACT Our work focuses on the impact of trade credit financing on firm efficiency exploiting a sample of Chinese manufacturing listed firms for the period 2004 to 2018. We find that trade credit significantly improves firm efficiency. This positive association is stronger in firms located in regions with higher levels of social trust, during periods with higher economic policy uncertainty and in times of economic downturn. We reveal three economic mechanisms underlying our baseline findings: alleviating financial constraints, mitigating agency conflicts, and reducing transaction costs.

Social Trust Towards Risk in International Business: A Cross-Country Analysis

There is a growing body of research on social trust in the literature in business and economics. This study adopts the conceptual and empirical relationship between trust behaviour and risk-taking propensity, and further extends the frontier of research on social trust by examining whether social trust can influence country risk in international business settings. Using a panel data set consisting of developing and developed countries over the period 1995–2019, the study performs a battery of empirical tests, and finds robust evidence that developing countries with a higher level of social trust appear to display a greater degree of financial uncertainty. The findings are consistent with recent experimental studies documenting a significant positive association between trust and risk-taking behaviour. The study provides new insights into the role of social trust in country risk assessment, and offers meaningful implications for international business.

Social capital and oral health promotion: Past, present, and future challenges.

Social capital has been widely inserted in health discussions in recent decades. In this sense, social capital has become a popular term and has been highlighted as one of the main determinants of health in the conceptual framework of the social determinants of the World Health Organization. The concept of social capital focuses on the positive consequences of sociability and places these consequences in the broader discussion of capital. In this sense, social capital reflects the benefits that individuals and communities derive from having broad social networks or high levels of social trust. Despite controversies regarding its definition and numerous criticisms, a growing body of evidence suggests that high levels of social capital benefit oral health. This factor has also been recognized as a potential softener of the impact of oral conditions on oral health, through behavioural and psychosocial processes. Thus, efforts to reduce inequities in oral health preferably should be based on their origins and on their complex causal process, such as the social determinants. The future challenges in the area are specially related to the development of interventions and health promotion actions that aim to stimulate social capital, aiming to reduce the impact of social inequalities on oral health throughout the life course.

INTERNET USE, FINANCE ACQUISITION AND RETURNING MIGRANT WORKERS’ HOME ENTREPRENEURSHIP — EMPIRICAL ANALYSIS BASED ON CLDS2016

Whether Internet use can inspire returning migrant workers’ home entrepreneurship is of great practical significance for promoting rural revitalization. Based on the data of China Labor Dynamic Survey (CLDS) in 2016, this paper empirically studies the impact of Internet use on returning migrant workers’ home entrepreneurship. The results show that, firstly, Internet use can significantly improve the entrepreneurial probability of migrant workers returning home by 8%. The results remain significant after using the instrumental variables method for endogenous problem solving and propensity score matching, changing the sample size for robustness testing. Secondly, Internet use promotes migrant workers returning home to make entrepreneurial choices mainly through expanding informal finance and obtaining formal finance. However, the mechanism of expanding informal finance has only been effective for returning migrant workers with higher level of social trust. Thirdly, Internet use has heterogeneous impact on returning migrant workers’ home entrepreneurship, which is reflected in the fact that Internet use will more significantly promote the entrepreneurial probability of migrant workers returning home with necessity entrepreneurship motivation, close to banks, eastern and central regions and developed areas, and internet use will also significantly promote the probability of opportunity entrepreneurship among migrant workers returning home who are satisfied with their household economic situation. Therefore, it is necessary to further improve the construction of broadband infrastructure in rural areas, especially western and developing areas, set up training platforms for returning migrant workers’ home entrepreneurship, promote employment through entrepreneurship and stimulate regional economic vitality, so as to accelerate rural revitalization.

Is Social Trust a Governance Mechanism? Evidence From Dividend Payouts of Chinese Firms

AbstractWhile management studies show that micro‐level trust within and between firms affects firm performance and innovation, it is unclear how macro‐level trust, namely social trust, affects corporate decisions. Addressing this is important because micro‐level trust is shaped by macro‐level social norms. A growing literature finds that corporations are influenced by local social norms. Drawing from this insight and using various measures of social trust, we examine the impact of social trust on dividend payouts. We find that levels of social trust, both in terms of directly measured trust and trust inferred from concomitant levels of civic social capital, negatively impact dividend payouts of local firms across Chinese provinces. We argue that community social trust supplies governance and plays a substitute role for dividend payouts, with a higher level of social trust engendering a lower demand for dividend payouts. This negative effect is more pronounced for younger firms, companies with high growth potential and firms in regions of less‐developed institutional environments. We further show that agency cost plays an important mediating role, since high social trust reduces agency cost, jointly affecting dividends. Firms in high‐trust regions make meaningful use of their greater retained earnings for research and development and innovations.

Hometown attachment and corporate social responsibility: Evidence from overseas Chinese entrepreneurs.

The relationship between hometown attachment (HA) and corporate social responsibility (CSR) is a topic to be explored in depth. We measured the HA by the Chinese diaspora background and the immigrant culture of the ultimate controllers of the firm and employed the sample of Chinese non-financial private-listed companies in Shanghai and Shenzhen from 2003 to 2019 to investigate the impact of the HA on overseas Chinese entrepreneurs on CSR. We found that the HA of the overseas Chinese ultimate controller significantly increases the level of CSR, and this promoting effect rises when the firm ultimately held by the overseas Chinese entrepreneur is registered in the expatriate hometown. Our further analysis found that the personal characteristics of overseas Chinese entrepreneurs and regional cultural differences have a moderating effect on the above relationship. In particular, we found that overseas Chinese entrepreneurs who are women or with lower academic qualifications have a stronger sense of CSR. Moreover, in areas with low marketization or a high level of social trust, HA of overseas Chinese entrepreneurs plays a more active role in CSR. The results remain robust after the robustness test and the endogenous test. The conclusion of this study not only highlights the impact of psychological factors on the level of CSR but also provides a reference for the study of the decision-making behavior of overseas Chinese entrepreneurs.