The Influence Of Social Trust On Corporate Financial Performance

The financial performance of enterprises in the capital market has been the focus of long-term attention and research by experts and scholars.Especially in recent years,the large-scale novel coronavirus epidemic has impacted China’s real economy,and enterprises urgently need to improve their profitability and financial performance.Listed companies are facing downward pressure.If they want to develop continuously,they should seek more factors or methods that can improve their financial performance.While the formal system is not yet perfect,it is of practical significance to study whether the informal system can regulate the relationship between the market,enterprises and the government more effectively,so as to create a new model of economic development and social governance.As an important component of the informal system,trust profoundly reflects the cohesion among specific groups and is another key factor affecting a country’s long-term economic growth after social capital.Some scholars have long put forward the view that every economic transaction contains elements of trust.Social trust can not only promote regional economic growth,but also affect the characteristics of industrial structure.empirical research on the relationship between social trust and firm microeconomy has only begun to emerge in recent years.Based on the realistic background that the legal environment of our country needs to be improved and the institutional environment of capital market is weak,and based on the differences of social trust among Chinese provinces,this paper attempts to explore the impact of social trust on corporate financial performance and its influence mechanism.Social trust not only affects the development of capital market from the macro perspective,but also affects the accounting and economic behavior of listed companies in the micro perspective.Based on this,this paper takes China’s A-share non-financial listed companies from 2011 to 2021 as research samples and investigates the relationship between social trust and corporate financial performance based on the survey data of China General Social Survey(CGSS).The results show that the level of regional social trust can significantly improve the financial performance of enterprises;Compared with state-owned enterprises,social trust has a more significant positive impact on the financial performance of non-state-owned enterprises.Through the analysis of the influence mechanism of social trust on corporate financial performance,it is found that corporate accounting information quality has an intermediary effect.Further study found that in areas with a high level of rule of law,the positive effect of social trust level on corporate financial performance will be strengthened,indicating that social trust and legal system is a complementary relationship.In China,which has typical regional characteristics,the issue of social trust has been concerned by all walks of life.This paper provides empirical evidence of the microeconomic consequences of social trust from the perspective of corporate financial performance.