Does social network improve corporate financing efficiency? Evidence from China

During China's economic transformation period, corporate financing efficiency is affected not only by public governance but also by social capital. Based on the data on China's A-share listed companies in 2005–2018, this paper uses the data envelopment analysis (DEA) method to measure financing efficiency and finds that social network has positive impact on corporate financing efficiency. There is the synergistic effect between social network and public governance on corporate financing efficiency. State-owned enterprises (SOEs) have significant comparative advantages over private enterprises in financing efficiency, and the positive effect of social network on financing efficiency is more significant in private firms. It also verifies that financing constraints and risk-taking play mediation roles in the relationship between social network and corporate financing efficiency. In addition, the social networks created by different position types of interlocking executives have different impacts on corporate financing efficiency, and social network can reduce the external financing demand by improving financing efficiency.