Common Ownership of Industrial Chain and Firm's Trade Credit Financing
Financing constraints are a major obstacle to business development and a challenging issue during the current economic transition.Due to credit rationing,enterprises often face high credit thresholds and borrowing costs when applying for bank loans.Consequently,seeking trade credit financing,which offers lower costs and reduced information asymmetry,has become a key channel for alleviating financing constraints.In the context of underdeveloped risk control mechanisms,social networks serve as informal substitutes for formal trade credit financing systems,playing a crucial role in supplier-customer contractual relationships.Research indicates that social networks,such as business associations and alumni connections,facilitate information exchange and trust-building,effectively supporting the provision of trade credit.However,these social network connections are highly private and concealed,making them difficult to replicate and expand.Therefore,establishing more transparent and market-oriented social network mechanisms is crucial for enhancing trade credit financing and meeting businesses'funding needs.With the development of diversified investment strategies,more shareholders hold stakes in multiple upstream and downstream enterprises within the industrial chain.We define these shareholders as common owners of industrial chain.Theoretically,as significant participants in corporate governance and key links between enterprises in the industrial chain,common owners of industrial chain may impact businesses'ability to secure trade credit financing in two ways.On the one hand,as crucial nodes in the flow of information within the industrial chain,common owners of industrial chain can enhance a company's ability to obtain and transmit information,which improves the company's bargaining power.On the other hand,common owners of industrial chain can improve a company's external reputation and reduce supply chain credit frictions,which can enhance corporate trade credit financing.To verify the above points,this study uses data from Chinese A-share listed companies from 2009 to 2021 to examine the impact and mechanisms of common owners of industrial chain on trade credit financing.The research found that common owners of industrial chain significantly enhance companies'trade credit financing capabilities by improving their information environment and external trust levels.Further analysis reveals that when common owners of industrial chain hold shares in upstream enterprises,they can enhance accounts payable trade credit financing through both information and trust channels.When common owners of industrial chain hold shares in downstream enterprises,they mainly improve mutual trust between businesses and customers,thereby increasing accounts receivable trade credit financing.Based on the above findings,this paper puts forward the following three policy recommendations.First,companies should effectively leverage the positive impacts of common owners in information transmission and resource allocation.This can help attract market resources efficiently and utilize stable supply chain relationships under equity linkage for high-quality development.Second,government regulators should actively guide and supervise common owners of industrial chain.By enhancing the synergistic benefits among equity-linked enterprises within the industrial chain,regulators can improve resource allocation efficiency and resilience of the industrial chain through equity linkage networks.Third,common owners of industrial chain should actively participate in corporate governance.By leveraging their central position in the industry,they can facilitate information exchange and resource sharing among companies,broadening the development prospects of invested enterprises.The research contributions of this paper are as follows.First,it extends previous research on the economic consequences of horizontal equity linkages to the vertical level by examining the impact of common owners on resource allocation within the industrial chain,thereby providing a valuable addition to the existing literature.Second,it expands the research on direct supplier-customer equity linkages to include potential upstream and downstream transaction counterparts,providing empirical evidence for a comprehensive understanding of vertical equity linkages within the industry.Third,from the perspective of equity networks,this paper enriches research on factors influencing trade credit financing,providing empirical evidence for business financing and government policy decisions.
common ownership of industrial chaintrade credit financinginformation mechanismtrust mechanism
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万方数据
