IDEAS home Printed from https://ideas.repec.org/a/wly/buseth/v35y2026i3p2119-2144.html

The Impact of Trade Credit Financing on Corporate Environmental Performance: Considering Financing Function Effects and Signaling Effects

Author

Listed:
  • Xukang Liu
  • Chaoqun Ma
  • Yi‐Shuai Ren

Abstract

China's economy has transitioned to a phase of high‐quality and sustainable development, with resource allocation now focusing on the integrated distribution of industrial and capital chains. This study examines the financing function and signaling effect of trade credit financing in the context of sustainability, utilizing the theories of comparative advantage in finance and signaling. This study analyzes the influence of trade credit financing on the corporate environmental performance (CEP) of A‐share listed firms in China from 2009 to 2022. The findings indicate that trade credit financing can markedly enhance CEP. This finding remained robust even after considering potential endogeneity. Furthermore, according to Corporate Governance Theory, both internal and external governance of firms can moderate the relationship between trade credit finance and CEP. Moreover, the mediating analysis reveals that trade credit financing influences CEP primarily through its finance function and signaling effects. Finally, trade credit financing has heterogeneous effects on different types and characteristics of firms. Our findings offer compelling evidence to thoroughly investigate the noneconomic ramifications of trade credit financing and support firms' sustainability objectives.

Suggested Citation

  • Xukang Liu & Chaoqun Ma & Yi‐Shuai Ren, 2026. "The Impact of Trade Credit Financing on Corporate Environmental Performance: Considering Financing Function Effects and Signaling Effects," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 35(3), pages 2119-2144, July.
    • Handle: RePEc:wly:buseth:v:35:y:2026:i:3:p:2119-2144
    DOI: 10.1111/beer.70026
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/beer.70026
    Download Restriction: no
    File URL: https://libkey.io/10.1111/beer.70026?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
    ---><---

    More about this item

    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:wly:buseth:v:35:y:2026:i:3:p:2119-2144. 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: Wiley Content Delivery (email available below). General contact details of provider: https://onlinelibrary.wiley.com/journal/26946424 .

    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.