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Digital transformation and trade credit provision: Evidence from China

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  • Liu, Guangqiang
  • Wang, Shenghua

Abstract

Trade credit is essential for enterprises in business activities. Given the current wave of digitalization, it is important to explore how digital transformation affects trade credit provision. Based on data on Chinese A-share listed enterprises from 2012 to 2019, we empirically examine the relationship between digital transformation and trade credit provision. We find that digital transformation significantly increases trade credit provision. The mechanism of the relationship is an increase in short-term bank credit. We further examine the heterogeneity of firms’ supply capacity and willingness, and find that the relationship is more significant among non-state-owned enterprises, enterprises with greater financing constraints and fierce market competition, and enterprises located in provinces that have low social trust than among other types. This paper extends the study of the economic consequences of firms’ digital transformation and the influencing factors of trade credit provision.

Suggested Citation

  • Liu, Guangqiang & Wang, Shenghua, 2023. "Digital transformation and trade credit provision: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:riibaf:v:64:y:2023:i:c:s027553192200191x
    DOI: 10.1016/j.ribaf.2022.101805
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    Cited by:

    1. Jinlong Chen & Weipeng Wu & Yiqun Zhuang, 2023. "Impact of Digital Supply Chain on Sustainable Trade Credit Provision: Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 15(15), pages 1-23, August.
    2. Li, Rui & Xu, Shoufu & Zhang, Yun, 2023. "Can digital transformation reduce within-firm pay inequality? Evidence from China," Economic Modelling, Elsevier, vol. 129(C).
    3. Yuan, Sai & Zhou, Ran & Li, Mengna & Lv, Chengchao, 2023. "Investigating the influence of digital technology application on employee compensation," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    4. Liang Tang & Haifeng Jiang & Shanshan Hou & Jun Zheng & Lianqi Miao, 2023. "The Effect of Enterprise Digital Transformation on Green Technology Innovation: A Quantitative Study on Chinese Listed Companies," Sustainability, MDPI, vol. 15(13), pages 1-18, June.
    5. Niu, Yuhao & Wang, Sai & Wen, Wen & Li, Sifei, 2023. "Does digital transformation speed up dynamic capital structure adjustment? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    6. Hu, Yan & Che, Dexin & Wu, Fei & Chang, Xi, 2023. "Corporate maturity mismatch and enterprise digital transformation: Evidence from China," Finance Research Letters, Elsevier, vol. 53(C).

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