From Trust to Innovation: How China’s Social Credit System Promotes Knowledge Sharing in Enterprises

This study develops a novel urban pilot dataset for the social credit system and investigates the mechanisms through which it drives knowledge sharing. We use a difference-in-differences model to analyze data from 26,308 Chinese observations from 2010 to 2023, demonstrating that the social credit system effectively increases corporate knowledge sharing. In mechanism analysis, we find that the social credit system promotes knowledge sharing by alleviating corporate financing constraints and reducing corporate defaults. Moreover, the social credit system’s enhancing effects are greater prominence within regions characterized by higher levels of digital infrastructure development and across China’s eastern territories. Overall, this article offers valuable insights for local governments to effectively leverage the social credit system to enhance corporate high-quality development in the knowledge economy.