Social Credit Environment Optimization and Local Commercial Bank Risk-Empirical Evidence from the Creation of the Social Credit System
Social credit,as a crucial supplement to formal institutions,plays a significant role in optimizing urban business environments and facilitating the circulation of the national economy.This study explores the external event of the phased establishment of the social credit system and investigates its impact on regional commercial banks'risk-taking using a difference-in-differences model.The findings reveal a substantial reduction in bank risk-taking following the implementation of the social credit system,and this conclusion holds robust across various specifications.Mechanism testing reveals that the construction of the social credit system reduces banks'risk exposure by alleviating information asymmetry within the banking sector.Furthermore,the implementation of the social credit system is associated with increased profitability,operational efficiency,and regulatory compliance for banks,suggesting motivational effects.Heterogeneity analysis suggests that the effects of social credit system implementation are more pronounced when cities are designated as demonstration cities,the regional legal environment is less favorable,or internal governance within banks is weaker.
Social Credit SystemBank RiskInformation AsymmetryCredit Environment
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