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Corporate financial digitalization, internal governance, and social trust

Author

Listed:
  • Liu, Yan
  • Tang, Zhongyin
  • Shao, Wei

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.

Suggested Citation

  • Liu, Yan & Tang, Zhongyin & Shao, Wei, 2024. "Corporate financial digitalization, internal governance, and social trust," Finance Research Letters, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324013242
    DOI: 10.1016/j.frl.2024.106295
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    References listed on IDEAS

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