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Two Forms of Trade Credit Finance in China

Author

Listed:
  • Go Yano

    (Graduate School of Economics, Kyoto University, Yoshida-honmachi, Sakyo-ku, Kyoto 606-8501, Japan.)

  • Maho Shiraishi

    (Faculty of Foreign Studies, The University of Kitakyushu, 4-2-1, Kitagata, Kokuraminami-ku, Kitakyushu 802-8577, Japan.)

Abstract

This paper investigates which forms of trade credit finance which corporate activities of non-state-owned enterprises in China, comparing coastal and interior areas. Using firm-level panel data for 1998–2007, we find: (1) trade credit in China supports investment by non-state owned-enterprises; (2) trade credit in the form of notes and accounts payable is more developed and actively used to finance investment in the coastal areas compared with the interior; and (3) the dominant and significant form of trade credit changes from deposits received to notes and accounts payable, likely driven by development of interfirm trust and increasing market competitiveness.

Suggested Citation

  • Go Yano & Maho Shiraishi, 2016. "Two Forms of Trade Credit Finance in China," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(1), pages 60-92, March.
    • Handle: RePEc:pal:compes:v:58:y:2016:i:1:p:60-92
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    Cited by:

    1. Zhang, Wen & Yan, Shaoshan & Li, Jian & Tian, Xin & Yoshida, Taketoshi, 2022. "Credit risk prediction of SMEs in supply chain finance by fusing demographic and behavioral data," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 158(C).
    2. Chakuu, Sumeer & Masi, Donato & Godsell, Janet, 2019. "Exploring the relationship between mechanisms, actors and instruments in supply chain finance: A systematic literature review," International Journal of Production Economics, Elsevier, vol. 216(C), pages 35-53.

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