Trust and corporate debt maturity mismatch: Evidence from China

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dc.contributor.authorWang XC
dc.contributor.authorHao W
dc.contributor.authorFang J
dc.contributor.authorWu JG
dc.contributor.authorZou L
dc.date.accessioned2024-01-29T01:46:00Z
dc.date.accessioned2024-07-25T06:51:24Z
dc.date.available2024-01-29T01:46:00Z
dc.date.available2024-07-25T06:51:24Z
dc.date.issued2023-12-22
dc.description.abstractThis study explores the relationship between social trust and firm debt maturity mismatch in the Chinese context. Additionally, we investigate the economic mechanisms through which social trust affects debt maturity mismatch, and the differential roles played by social trust among firms with different characteristics. We employ enterprise trustworthiness scores and provincial blood donation rates as our measures of regional social trust level and find a negative relationship between local trust and firm debt maturity mismatch, suggesting that social trust which promotes ethical norms acts as a restraint on firms' propensity for excessive risk. An alternative but consistent explanation is higher social trust increases debtors' willingness to lend, hence it reduces firms' funding costs and consequently the potential cost-saving motivation behind such a mismatch. We further document evidence that social trust improves the firm information environment and consequently risk-taking and/or the ability to reduce funding costs. The study also reveals variations in the role of social trust based on firm characteristics, such as leverage and profitability, and the ownership structure (state-owned enterprises vs. non-state-owned enterprises). The findings contribute to the literature by highlighting the increasing importance of social capital for policy and governance.
dc.description.confidentialfalse
dc.identifier.citationWang XC, Hao W, Fang J, Wu J, Zou L. (2023). Trust and corporate debt maturity mismatch: Evidence from China. Accounting and Finance.
dc.identifier.doi10.1111/acfi.13214
dc.identifier.elements-typejournal-article
dc.identifier.issn0810-5391
dc.identifier.urihttps://mro.massey.ac.nz/handle/10179/71029
dc.publisherJohn Wiley and Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand.
dc.relation.isPartOfAccounting and Finance
dc.rights(c) 2023 The Author/s
dc.rightsCC BY-NC-ND 4.0
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.titleTrust and corporate debt maturity mismatch: Evidence from China
dc.typeJournal article
pubs.elements-id485335
pubs.organisational-groupMassey Business School
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