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Corporate financialization matters trade credit financing: Evidence from China’s non-financial listed companies

Author

Listed:
  • Xiaohua Huang

    (School of Economics and Statistics, Guangzhou University, Guangzhou, China)

  • Benhuan Nie

    (School of Economics and Statistics, Guangzhou University, Guangzhou, China)

  • Zhehao Huang

    (Guangzhou Institute of International Finance, Guangzhou University, Guangzhou, China)

Abstract

This study empirically examines the influence of corporate financialization on trade credit financing, focusing on non-financial companies listed in China's A-share market from 2010 to 2022. The results indicate that as corporate financialization increases, companies will obtain less trade credit financing. Further incorporating moderating factors like market position and financing constraints, we find that a higher market position effectively mitigates the negative impact of corporate financialization on trade credit financing, whereas higher financing constraints exacerbate the adverse effects of corporate financialization on trade credit financing. Additional analysis shows that corporate financialization negatively affects trade credit financing by crowding out main business performance and increasing operational risks. Moreover, corporate financialization more strongly inhibits trade credit financing in state-owned companies.

Suggested Citation

  • Xiaohua Huang & Benhuan Nie & Zhehao Huang, 2024. "Corporate financialization matters trade credit financing: Evidence from China’s non-financial listed companies," Economic Analysis Letters, Anser Press, vol. 3(3), pages 32-45, September.
    • Handle: RePEc:bba:j00004:v:3:y:2024:i:3:p:32-45:d:354
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    References listed on IDEAS

    as
    1. Li, Hong-Quan & Yang, Yang & Xue, Feng-Wan & Liu, Zhi-Yi, 2024. "Annual report readability and trade credit financing: Evidence from China," Research in International Business and Finance, Elsevier, vol. 69(C).
    2. Hsiao-Hui Lee & Jianer Zhou & Jingqi Wang, 2018. "Trade Credit Financing Under Competition and Its Impact on Firm Performance in Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 20(1), pages 36-52, February.
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