| How to curb the dual agency costs is one of the key focuses of current corporate governance research.According to institutional theory,institutional factors significantly influence participants’ behaviour and the performance of corporate governance.As a key component of informal institutions,social trust has been shown to have an important impact on business behaviour,but there is little literature on the role of social general trust on agency costs.So,can social general trust have an impact on dual agency costs?Based on the heterogeneous governance differences between regions,this paper empirically tests how social general trust alleviate the dual agency problems,using data of Ashare listed companies from 2010 to 2020 as the research object.The results found that:Firstly,social general trust has a significant inhibiting effect on dual agency costs.Secondly,improving the efficiency of corporate governance is an important reason why social general trust can alleviate agency problems.Further research found that when listed companies are located in regions where the market is underdeveloped and the internal governance structure cannot effectively play a supervisory and incentive role,the inhibitory effect of social general trust on Type Ⅰ agency costs is stronger.Similarly,its inhibitory effect is stronger in firms with higher separation of two rights and lower equity checks and balances.Thirdly,managerial ability and particular trust affect the role of social general trust.Social general trust having a more significant inhibitory effect on Type Ⅰ agency costs when managerial ability is insufficient.At lower levels of particular trust,social general trust has a more significant inhibitory effect on Type Ⅱ agency costs.Finally,the study shows that there is a substitution effect between the social general trust and the regional formal system.This further validates that social general trust can reduce dual agency costs by enhancing the efficiency of corporate governance.This study has important theoretical and practical implications.By emphasizing the governance effect of social general trust,this paper expands the research perspective of institutional theory and principal-agent theory in the Chinese governance scenario,and provides a new perspective and approach to alleviate the dual agency problems in the special Chinese scenario.This paper draws on the empirical findings to provide theoretical suggestions for corporate development in terms of organization culture building,governance structure improvement and executive selection and recruitment mechanisms,and gives references for government policy formulation in terms of social credit system building and values guidance. |
