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Linguistic Diversity and Firms' Debt‐to‐Asset Ratio: Evidence From Chinese Dialects

Yuqing Shi

Managerial and Decision Economics2026https://doi.org/10.1002/mde.70093article
AJG 2ABDC B
Weight
0.50

What the paper says

ABSTRACT This paper uses the data from the Chinese Industrial Enterprises Database from 2004 to 2007 and combines it with the urban dialect‐differences index to empirically study how dialect differences affect a firm's debt‐to‐asset ratio. This paper discovers that linguistic diversity reduces a firm's debt‐to‐asset ratio, and such results remain valid after various robustness tests. Mechanism analysis indicates that dialect differences suppress the debt‐to‐asset ratio mainly by weakening the regional trust foundation rather than increasing communication costs. This paper uncovers the micro‐mechanism where dialect differences lead to trust depletion, which in turn shortens debt maturity, raises financing costs, and ultimately causes a decline in the debt‐to‐asset ratio. It offers a solution from the perspective of cultural institutions to break through regional financing barriers.

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https://doi.org/https://doi.org/10.1002/mde.70093

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@article{yuqing2026,
  title        = {{Linguistic Diversity and Firms' Debt‐to‐Asset Ratio: Evidence From Chinese Dialects}},
  author       = {Yuqing Shi},
  journal      = {Managerial and Decision Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1002/mde.70093},
}

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Linguistic Diversity and Firms' Debt‐to‐Asset Ratio: Evidence From Chinese Dialects

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.