Trust in the digital age: how cybersecurity governance willingness shapes trade credit – evidence from supplier credit decisions

In the digital economy, the importance of robust cybersecurity governance for corporate financing stability has become increasingly salient. Using a sample of Chinese A-share listed companies from 2011 to 2023, we employ the Word2vec natural language processing technique to develop a measure of corporate cybersecurity governance commitment. Our study empirically examines its impact on trade credit financing. The results indicate that a firm’s expressed commitment to cybersecurity governance is positively associated with the trade credit it receives from suppliers. We find that information asymmetry and corporate reputation are key mechanisms through which this effect operates. Heterogeneity analysis reveals that this effect is more pronounced for firms that have received regulatory inquiry letters, those without political ties, those operating during periods of high economic policy uncertainty, and those located in regions with low social trust. Furthermore, we show that when firms’ stated commitments align with their actions, suppliers adjust their business relationships by allocating a greater share of procurement volume to them, thereby strengthening long-term supply chain trust. Our findings offer valuable insights for firms in emerging economies seeking to enhance their cybersecurity governance and optimize their financing environment.