Abstract: Debt can play its role of contingent governance by constraining non-efficient investment. The governance mechanism has been widely validated under the institutional environment. Thus, this paper aims to answer whether this mechanism is still valid under the non-institutional environment. Using the data of 1378 Chinese listed family firms from 2008 to 2014 in Shanghai and Shenzhen A-share market, this paper studies the moderating effect of social capital on debt sources & maturity. The empirical evidence indicates that in terms of debt sources, bank loans, commercial credit and corporate bonds in varying degrees all inhibit the overinvestment and alleviate the underinvestment; but social capital only has significant moderating effect on the influence of commercial credit on non-efficient investment In other words, the more social capital there is in a region, the more significant role commercial credit can play in inhibiting the overinvestment and alleviating the underinvestment. In terms of debt maturity, to some extent, the increase of long-term debt ratio can aggravate overinvestment and underinvestment, but social capital will relieve the situation. While the increase of short-term debt ratio will inhibit the overinvestment and alleviate the underinvestment, and social capital do strengthen the positive effects. This paper discusses the relationship between debt sources & maturity and non-efficient investment from the perspective of social capital, and extends and enriches relevant study on social capital.

Key words: social capital, debt source, debt term, non-efficient investment, listed family firms