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Analysis of the alleviating effect of accounts receivable pledge financing on financing constraints

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  • Li, Mo
  • Li, Chunyan
  • Duan, Mingchen
  • Hou, Wenjia
  • Pan, Xingchen

Abstract

This paper examines the relationship between accounts receivable pledge financing and corporate financing constraints, utilizing a sample of small and medium-sized enterprises (SMEs) listed on China's Small and Medium Enterprise Board from 2014 to 2022. The findings reveal that accounts receivable pledge financing serves as an effective means to alleviate financing constraints faced by SMEs. Notably, this relief is more pronounced in regions with a higher concentration of small and medium-sized banks and weaker legal institutional environments. Furthermore, for enterprises with political connections, the financing through accounts receivable pledge exhibits an even stronger bailout effect.

Suggested Citation

  • Li, Mo & Li, Chunyan & Duan, Mingchen & Hou, Wenjia & Pan, Xingchen, 2024. "Analysis of the alleviating effect of accounts receivable pledge financing on financing constraints," Finance Research Letters, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324013400
    DOI: 10.1016/j.frl.2024.106311
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