An Empirical Study Into The Relationship Between Social Credibility And Corporate Financing Decision From The Perspective Of Informal Regulation

New Institutional Economics suggest that economic regulations that are used to define, regulate and coordinate people’s economic activities and relationships contain both "formal regulations" and "informal regulations". Accompanied with continuous development of human beings, information regulations are more important that formal regulations under some circumstances. Scholars generally hold viewpoints that "Chinese economic miracle" since the reform and open up policy had testified the information regulations that are matched with the current social system, which can promote the healthy development of the national eoconomy.Credibility is an important component of informal regulation, which constructs the essence of information regulation together with value and belief, custom and habit as well as ideology. Aside from human capital and material capital, credibility is regarded as a main type of social capital that determines the economic growth and social progress of a country. It can improve the anticipation of human mutually normative and honest cooperation, which would promote the emergence of cooperative behavior. Additionally, it can also reduce the possibility of moral hazard within the process of cooperation among economic entities.In comparison to law ownership and other formal regulations, credibility plays the role of "lubrication" among different economic entities, which can be regarded as an implicit incentive and constraint.Informal regulation not only influences the economic and financial development from the macroeconomic dimension, but also affects the corporate finance decisions from the microeconomic perspective. Among all those affects, credibility and social participating degree affects most significantly upon corporate investing and financing environment as well as strategic decision makings. Vast territory and wide regions coupled with considerable distinction of regional culture contribute to the significant difference of social credibility among different districts, which provide the entry point for this dissertation. What effects will different social credibility levels among different districts exert upon corporate financial decision makings? What functions will social credibility play in the process of corporate financial decision makings? Those are core issues this dissertation tries to focus on.This dissertation stands from the micro-perspective, which focuses on the research sample of Chinese A share listed companies from2002to2009. It systematically explores into the impacts of credibility level on corporate finance structure and debt financing costs, which makes contribution to the research field in respect to the role social credibility plays in corporate mergers and acquisitions (M&A) behavior. This research finally finds that:(1) Districts with higher social credibility level will tend to contribute to higher possibility of the emergence of merger and acquisition behavior as well as higher frequency of mergers and acquisitions;(2) Social credibility level significantly affects the debt financing costs of a corporation. Higher level of social credibility contributes to lower debt financing costs. Nonetheless, there is significantly negative relationship between corporate social credibility level and debts-to-assets ratio;(3) Social credibility tends to decrease corporate investments-cash flows sensitivity, which will alleviate the corporate financing constraints problem.