IDEAS home Printed from https://ideas.repec.org/a/eee/pacfin/v91y2025ics0927538x25000630.html
   My bibliography  Save this article

Does judicial procedure reform affect firms' access to trade credit? Evidence from China

Author

Listed:
  • Lyu, Huaili
  • Peng, Meng
  • Lin, Yanyan

Abstract

China initiated a two-year reform of civil procedure in 2020, aiming at promoting the separation of complex and simple cases. Based on the civil procedure reform, this study explores the effect of improved judicial efficiency on trade credit. Using a sample of Chinese A-share listed firms, we find that the civil procedure reform increases firms' access to trade credit by improving judicial efficiency. The positive effect on trade credit is more pronounced for firms located in regions with low social trust and those facing high financial constraints. We further document that the civil procedure reform reduces supplier concentration. Overall, our findings imply that judicial procedure reform plays a critical role in firms' access to trade credit, extending the literature on law and finance.

Suggested Citation

  • Lyu, Huaili & Peng, Meng & Lin, Yanyan, 2025. "Does judicial procedure reform affect firms' access to trade credit? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:pacfin:v:91:y:2025:i:c:s0927538x25000630
    DOI: 10.1016/j.pacfin.2025.102726
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X25000630
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.pacfin.2025.102726?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Judicial efficiency; Trade credit; Civil procedure reform;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pacfin:v:91:y:2025:i:c:s0927538x25000630. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/pacfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.