Government Regulation,Trade Credit System and SOE Competitiveness:A Quasi-natural Experiment based on the"Clearing Delinquent Accounts"
Traditional trade credit theory holds that trade credit plays an important complementary role in allocating financial resources and has become one of the important external short-term financing sources for firms.However,financially unconstrained firms still take trade credit to obtain supplier liquidity,which squeeze supplier cash and expose them to liquidity risk.Therefore,governments have introduced regulatory measures to regulate trade credit.Taking the"clearing delinquent accounts"in China as a quasi-natural experiment,this paper studies the effect of the trade credit system under government regulation on enterprise competitiveness and its mechanism.The findings are as follows:The quick pay of state-owned enterprises'trade credit under government regulation improves their competitiveness,which indicates that the quick pay of trade credit has a positive spillover effect.The mechanism test shows that the trade credit system under government regulation can not only reshape the markets orderings of state-owned enterprises'trade credit,reduce the default of the accounts of state-owned enterprises and guarantee the effective collection of the suppliers,but also enhance the suppliers'trust in the trade credit repayment of state-owned enterprises on time and reduce the resource dissipation of the suppliers'recovery of accounts.This strengthens the attraction of state-owned customers for suppliers,increases the competition between suppliers,and then enhances the raw material bargaining power of state-owned enterprises,and ultimately promotes the improvement of state-owned enterprises'competitiveness.The heterogeneity test finds that the greater the enforcement of"clearing delinquent accounts"and the.greater the degree of market competition,the more significant the spillover effects of the trade credit system under government regulation.This further verifies the logic of the mechanism and further proves that the improvement of state-owned enterprises competitiveness is indeed the function of"clearing delinquent accounts".The possible marginal contributions of this paper are as follows:In terms of literature,firstly,existing studies mainly focus on the influence of limiting or shortening the payment default policy on suppliers,but lack attention to the influence on the policy implementing enterprise.This paper innovatively puts forward the positive influence of the restricting payment arrears under government regulation on the policy implementing enterprise.Secondly,existing studies have studied the economic consequences of trade credit,mainly from the positive effects of trade credit on short-term financing and business operating,and the negative effects of financially unconstrained firms still squeezing cash from suppliers through trade credit,while paying less attention to the spillover effects of the quick pay of trade credit.This paper expands the relevant research on trade credit from the perspective of the spillover effect of the quick pay of trade credit under government regulation.Thirdly,research on the use of trade credit and price in competition is relatively separate.This paper provides evidence of the substitution effect of credit and price in the process of competition.In terms of policy,firstly,the government should expand the scope of enterprises under the supervision of relevant laws and regulations on account arrears from government organs,state-owned enterprises and large enterprises to medium-sized enterprises,in order to further optimize the markets orderings of China's trade credit and enhance the trust of market subjects.Secondly,they can improve the policy enforcement of laws and regulations related to account arrears by establishing arrears supervision institutions,increasing the information disclosure of arrears and repayment,bringing large arrears into the discussion of shareholders'meetings,and requiring external audit opinions on arrears.Thirdly,the government can further relax industry access regulation,promote the synergy effect of policies,and strengthen the implementation effect of relevant laws and regulations on account arrears.
government regulationtrade credit systemraw material bargaining powerenterprise competitivenessclearing delinquent accounts
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