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The Impact of Commercial Credit on Firm Innovation: Evidence from Chinese A-Share Listed Companies

Author

Listed:
  • Tinghua Liu

    (School of Economics, Shandong University of Technology, Zibo 255012, China)

  • Jingru Wang

    (School of Economics, Shandong University of Technology, Zibo 255012, China)

  • Dilesha Nawadali Rathnayake

    (School of Economics, Shandong University of Technology, Zibo 255012, China)

  • Pierre Axel Louembé

    (School of Accounting, Dongbei University of Finance & Economics, Dalian 116025, China)

Abstract

This paper analyses the data on Chinese A-share listed companies from 1996 to 2019, using fixed-effect regression and the double-difference method to systematically examine the impact of commercial credit on enterprise technological innovation. The study found that the acquisition and provision of commercial credit has promoted the number of enterprise technological innovations and significantly improved their quality. In particular, the innovation of highly constrained companies is promoted by financing. Our findings help to solve the obstacles enterprises face in breaking through financing constraints and improving the efficiency and quality of their innovative efforts. The financing system has a significant influence on promoting the sustainable development of innovative enterprises.

Suggested Citation

  • Tinghua Liu & Jingru Wang & Dilesha Nawadali Rathnayake & Pierre Axel Louembé, 2022. "The Impact of Commercial Credit on Firm Innovation: Evidence from Chinese A-Share Listed Companies," Sustainability, MDPI, vol. 14(3), pages 1-23, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1481-:d:735850
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    References listed on IDEAS

    as
    1. Rennings, Klaus, 2000. "Redefining innovation -- eco-innovation research and the contribution from ecological economics," Ecological Economics, Elsevier, vol. 32(2), pages 319-332, February.
    2. Gunday, Gurhan & Ulusoy, Gunduz & Kilic, Kemal & Alpkan, Lutfihak, 2011. "Effects of innovation types on firm performance," International Journal of Production Economics, Elsevier, vol. 133(2), pages 662-676, October.
    3. Justin Doran & Geraldine Ryan, 2016. "The Importance of the Diverse Drivers and Types of Environmental Innovation for Firm Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 25(2), pages 102-119, February.
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    Cited by:

    1. Daquan Gao & Christina W. Y. Wong & Kee-hung Lai, 2023. "Development of Ecosystem for Corporate Green Innovation: Resource Dependency Theory Perspective," Sustainability, MDPI, vol. 15(6), pages 1-28, March.

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