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<p>Bond credit ratings are pivotal in financial markets, yet persistent ethical lapses, such as rating inflation and rating&#xa0;shopping, have eroded trust and integrity in China’s bond sector, exacerbating defaults and systemic inequities. This study explores the underexamined role of clan culture, a key informal ethical institution in China rooted in kinship-based moral norms, in shaping corporate behavior amid institutional voids. Drawing on bond rating data from 2005 to 2020, we investigate how regional clan culture intensity influences ratings and underlying mechanisms. Findings indicate a negative association with bond ratings but a positive link to actual performance, yielding a “low rating–high credit quality” ethical paradox. We propose a framework integrating relational ethics and the “trust radius” theory: clan networks amplify moral reputation costs, deterring unethical manipulation, while formal rating models overlook informal governance advantages, such as reciprocity and collective responsibility, leading to undervaluation. Heterogeneity analyses reveal amplified biases in firms with low transparency, non-listed status, or weak financing constraints, alongside clan culture’s substitutive role with legal institutions in upholding ethical bond compliance. Contributions include: (1) theoretically advancing relational ethics by extending trust radius to moral cost amplification in finance; (2) empirically evidencing clan’s dual ethical impact—curbing opportunism while exposing systemic biases; and (3) practically guiding regulators toward culturally attuned reforms for fairer, more transparent markets.</p>

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Clan Culture, Reputation Constraints, and Bond Credit Ratings

  • 期刊论文

  • 发表日期：

    2026年7月28日

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  • Ao Shu,
  • Fengyi Wu,
  • Fengwen Chen,
  • Wei Wang,
  • Yue Zhou

摘要

Bond credit ratings are pivotal in financial markets, yet persistent ethical lapses, such as rating inflation and rating shopping, have eroded trust and integrity in China’s bond sector, exacerbating defaults and systemic inequities. This study explores the underexamined role of clan culture, a key informal ethical institution in China rooted in kinship-based moral norms, in shaping corporate behavior amid institutional voids. Drawing on bond rating data from 2005 to 2020, we investigate how regional clan culture intensity influences ratings and underlying mechanisms. Findings indicate a negative association with bond ratings but a positive link to actual performance, yielding a “low rating–high credit quality” ethical paradox. We propose a framework integrating relational ethics and the “trust radius” theory: clan networks amplify moral reputation costs, deterring unethical manipulation, while formal rating models overlook informal governance advantages, such as reciprocity and collective responsibility, leading to undervaluation. Heterogeneity analyses reveal amplified biases in firms with low transparency, non-listed status, or weak financing constraints, alongside clan culture’s substitutive role with legal institutions in upholding ethical bond compliance. Contributions include: (1) theoretically advancing relational ethics by extending trust radius to moral cost amplification in finance; (2) empirically evidencing clan’s dual ethical impact—curbing opportunism while exposing systemic biases; and (3) practically guiding regulators toward culturally attuned reforms for fairer, more transparent markets.