Credit Sales Control,Billing of Receivables,and Microeconomic Effects:Evidence from the Policy for Reducing Receivables of Central Enterprises
While China's supply network develops rapidly,its stability and security also face many challenges.The report to the 20th National Congress of the Communist Party of China clearly proposes to"make China's industrial and supply chains more resilient and secure".As the basis for the formation of supply relations,the most representative form of transactions between Chinese enterprises is delivery before payment,i.e.,credit sales.However,as a commercial behavior with financial attributes,a large number of credit sales transactions implies the expansion of credit scale between enterprises,which may cause damage to the security of enterprises and the industrial and supply chains if not properly controlled.This article takes the credit sales control policy issued by the State-owned Assets Supervision and Administration Commission of the State Council of China in 2015 as a quasi-natural experiment to analyze the impact of the policy on credit sales transactions without bills.The results are as follows.The scale of credit sales transactions without bills has decreased.Enterprises are increasingly adopting credit sales with bills.The sales performance of enterprises has decreased.The liquidity of enterprises has increased,which is manifested by an increase in current assets and overall cash holdings.Further analysis indicates.The credit sales control policy has improved the quality of enterprises'account receivables.Notes receivables are more convenient for financing compared with accounts receivables,which explains the increase in liquidity of enterprises.In addition,enterprises may also obtain more liquidity by occupying upstream funds.The credit sales control policy has not reduced the funding provided by enterprises to the supply chain,but it may cause challenges to the coordination of funds with upstream and downstream enterprises.This article believes that firstly,the government should adhere to the policy of controlling credit transactions without bills,and guide enterprises to adopt credit transactions with bills,in order to improve enterprises'liquidity by standardizing the credit transactions between enterprises.Secondly,the credit sales control policy should be equipped with dynamic monitoring system to ensure its effective implementation.Thirdly,enterprises should prioritize improving product quality and core business competitiveness rather than channel competitiveness on the basis of improving the competition mechanism in the product market.
credit sales controlbilling of receivablescommercial creditcentral enterprises
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