Yunqing Tao

Jun 8, 2023 | onlinelibrary.wiley.com | Nan Sun |Xuan Leng |Jiaxuan Li |Yunqing Tao

The rapid growth of leverage is one of the risk factors for China's economy. To explore social credit's impact on corporate leverage's growth rate, we conduct the staggered difference-in-difference (DID) approach based on a quasi-natural experiment of the social credit system reform. Our findings indicate that social credit significantly suppresses the growth rate of corporate leverage, which remains robust after some robustness checks.