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The power of the many: how retail investor attention reshapes corporate trade credit and bank loans

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  • Li, Weiping
  • Xie, Chenyuan
  • Liu, Cai

Abstract

Our study on China-listed firms from 2011 to 2022 reveals that heightened retail investor attention significantly decreases corporate trade credit and boosts bank loan accessibility. This effect is consistent across different robust checks, such as propensity score matching and industry/regional shock controls. We find that this attention enhances information transparency, influencing both trade credit and bank loans. Notably, the impact is more pronounced in the absence of professional information intermediaries. This research deepens the understanding of retail investor attention's economic impact, shedding light on the substitutive relationship between trade credit and bank loans.

Suggested Citation

  • Li, Weiping & Xie, Chenyuan & Liu, Cai, 2024. "The power of the many: how retail investor attention reshapes corporate trade credit and bank loans," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012467
    DOI: 10.1016/j.frl.2024.106217
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