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Mixed ownership reform and trade credit: Evidence from China

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  • Song, Gaoya
  • Li, Quan

Abstract

We investigate the impact of mixed ownership reform (MOR) intensity on trade credit obtained by state-owned enterprises (SOEs) in China from 2009 to 2021. Drawing on a novel, hand-collected database, we find that MOR intensity has a significantly negative effect on trade credit. The path analyses show that financial constrains and corporate profitability are the channel of our main finding. Moreover, the negative relationship between MOR intensity and trade credit is more pronounced for central SOEs, firms facing weaker market competition or higher supplier concentration. This study explores the causes of an SOE's trade credit demand and the consequences of MOR in China.

Suggested Citation

  • Song, Gaoya & Li, Quan, 2024. "Mixed ownership reform and trade credit: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 95(PC).
    • Handle: RePEc:eee:finana:v:95:y:2024:i:pc:s105752192400423x
    DOI: 10.1016/j.irfa.2024.103491
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    More about this item

    Keywords

    Mixed ownership reform; Bargaining power; Trade credit;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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