IDEAS home Printed from https://ideas.repec.org/a/eee/pacfin/v99y2026ics0927538x26002106.html

When origins become liabilities: Restructured family firms and trade credit access

Author

Listed:
  • Li, Weiping
  • Zhang, Hanfang
  • Xia, Jingjing

Abstract

This study explores the understudied impact of ownership origin on informal financing within the family firm sector. Using a sample of Chinese listed firms from 2007 to 2022, we compare restructured family firms (RFFs)—privatized ex-SOEs—with entrepreneurial family firms (EFFs). We find that RFFs receive significantly less trade credit than their entrepreneurial counterparts. Our mechanism tests attribute this gap to supply-side rationing caused by agency risks (principal–principal conflicts) rather than a lack of demand due to better formal financing access. Consistent with this view, the trade credit penalty is more severe when family incentives to curb expropriation are limited, and when external governance is weak. Furthermore, this financing friction imposes real economic costs, as RFFs exhibit lower profitability attributable to restricted supply-chain credit. These findings underscore ownership origin as a novel determinant of trade credit, demonstrating a “liability of origin” where supply-chain partners ration credit based on the governance risks inherent in privatization legacies.

Suggested Citation

  • Li, Weiping & Zhang, Hanfang & Xia, Jingjing, 2026. "When origins become liabilities: Restructured family firms and trade credit access," Pacific-Basin Finance Journal, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:pacfin:v:99:y:2026:i:c:s0927538x26002106
    DOI: 10.1016/j.pacfin.2026.103264
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X26002106
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.pacfin.2026.103264?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

    for a different version of it.

    More about this item

    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
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    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:99:y:2026:i:c:s0927538x26002106. 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.