Work

Corporate financial digitalization, internal governance, and social trust

Year: 2024

Type: article

Abstract: Taking advantage of a comprehensive sample of China's A-share listed companies from 2012 to 2022, this research examines the relationship between Corporate financial digitalization and a society's trust in firms. We provide robust evidence that the level of financial digitalization is positively related to social trust. Moreover, we document that the positive relationship is more pronounced for firms with effective internal governance because it can mitigate conflicts of interests between insiders and outsiders. Our findings are robust to a battery of sensitivity tests. Overall, this research contributes to the fast-growing literature on financial digitalization and social trust as well as provides valuable practical implications for investors, managers, and policymakers.

Source: Finance research letters

DOI: 10.1016/j.frl.2024.106295

Authors: Yan Liu, Zhongyin Tang, Wei Shao

Institutions: Guangdong University of Finance, City University of Macau, Shanghai Business School

Language: English

Topic: Digital Transformation in Financial Services

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,350