Social capital and debt maturity

A key component of social capital, the level of trust, is essential for economic success in society. Social capital helps companies choose the right level of debt and capital. Therefore, it leads economic behaviors towards collective welfare. The type of debt maturity structure and the achievement of optimal levels are always considered by analysts. In connection with the optimal level of borrowing; Short-term and long-term borrowing rates in areas with different levels of social capital were considered. By examining the relationship between social capital and debt maturity, the effect of the amount of trust created through social capital in this regard was examined.

Social capital in this study includes total social capital and each of its three levels: social capital at the macro, intermediate and micro levels. The research sample includes information of 121 companies (From 23 province) listed on the Tehran Stock Exchange during the years 2014 to 2018.

The general results of the hypotheses show that the total social capital and each of its levels, with the maturity of short-term and long-term debts, respectively; There is a significant negative and positive relationship. In other words, companies located in areas with high social capital have less short-term and longer-term debt maturities in their capital structure than companies located in areas with low social capital. Therefore, the cost of financing in these companies is lower due to their location in areas with higher social capital.