IDEAS home Printed from https://ideas.repec.org/p/not/notgep/2020-14.html
   My bibliography  Save this paper

Inventory investment and the choice of financing: Does financial development play a role?

Author

Listed:
  • Junhong Yang,
  • Alessandra Guariglia
  • Yuchao Peng
  • Yukun Shi

Abstract

Using a panel of 224,604 Chinese firms over the period 2004-2009, together with a set of unique city-level financial development data, we document a positive and significant association between both bank loans and trade credit and inventory investment. Furthermore, we find that in cities with relatively high (low) financial development, firms rely more on bank loans (trade credit) to finance their inventory investment. Finally, we show that the moderating effect played by financial development on the association between bank loans/trade credit and inventory investment is more pronounced for firms more likely to face financing constraints, namely privately-owned, small firms, with no political connections, located in coastal regions. Our results are robust to using a variety of different specifications and estimation methods.

Suggested Citation

  • Junhong Yang, & Alessandra Guariglia & Yuchao Peng & Yukun Shi, 2020. "Inventory investment and the choice of financing: Does financial development play a role?," Discussion Papers 2020-14, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:2020-14
    as

    Download full text from publisher

    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2020/gep-2020-14.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Allen, Franklin & Qian, Meijun & Xie, Jing, 2019. "Understanding informal financing," Journal of Financial Intermediation, Elsevier, vol. 39(C), pages 19-33.
    2. Ding, Sai & Guariglia, Alessandra & Knight, John, 2013. "Investment and financing constraints in China: Does working capital management make a difference?," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1490-1507.
    3. Guariglia, Alessandra & Liu, Xiaoxuan & Song, Lina, 2011. "Internal finance and growth: Microeconometric evidence on Chinese firms," Journal of Development Economics, Elsevier, vol. 96(1), pages 79-94, September.
    4. Jean-Noël Barrot, 2016. "Trade Credit and Industry Dynamics: Evidence from Trucking Firms," Journal of Finance, American Finance Association, vol. 71(5), pages 1975-2016, October.
    5. Thorsten Beck & Asli Demirguc‐Kunt & Luc Laeven & Ross Levine, 2008. "Finance, Firm Size, and Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1379-1405, October.
    6. Lin, Boqiang & Liu, Chang, 2016. "Why is electricity consumption inconsistent with economic growth in China?," Energy Policy, Elsevier, vol. 88(C), pages 310-316.
    7. Nianhang Xu & Xinzhong Xu & Qingbo Yuan, 2013. "Political Connections, Financing Friction, and Corporate Investment: Evidence from Chinese Listed Family Firms," European Financial Management, European Financial Management Association, vol. 19(4), pages 675-702, September.
    8. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    9. Poncet, Sandra & Steingress, Walter & Vandenbussche, Hylke, 2010. "Financial constraints in China: Firm-level evidence," China Economic Review, Elsevier, vol. 21(3), pages 411-422, September.
    10. Guariglia, Alessandra & Poncet, Sandra, 2008. "Could financial distortions be no impediment to economic growth after all? Evidence from China," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 633-657, December.
    11. Mateut, Simona & Bougheas, Spiros & Mizen, Paul, 2006. "Trade credit, bank lending and monetary policy transmission," European Economic Review, Elsevier, vol. 50(3), pages 603-629, April.
    12. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    13. Kashyap, Anil K & Stein, Jeremy C & Wilcox, David W, 1993. "Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance," American Economic Review, American Economic Association, vol. 83(1), pages 78-98, March.
    14. Thapa, Chandra & Rao, Sandeep & Farag, Hisham & Koirala, Santosh, 2020. "Access to internal capital, creditor rights and corporate borrowing: Does group affiliation matter?," Journal of Corporate Finance, Elsevier, vol. 62(C).
    15. Yi Huang & Marco Pagano & Ugo Panizza, 2020. "Local Crowding‐Out in China," Journal of Finance, American Finance Association, vol. 75(6), pages 2855-2898, December.
    16. Chen, Anping, 2010. "Reducing China's regional disparities: Is there a growth cost?," China Economic Review, Elsevier, vol. 21(1), pages 2-13, March.
    17. Li, Hongbin & Meng, Lingsheng & Wang, Qian & Zhou, Li-An, 2008. "Political connections, financing and firm performance: Evidence from Chinese private firms," Journal of Development Economics, Elsevier, vol. 87(2), pages 283-299, October.
    18. Sudipto Dasgupta & Erica X N Li & Dong Yan, 2019. "Inventory Behavior and Financial Constraints: Theory and Evidence," The Review of Financial Studies, Society for Financial Studies, vol. 32(3), pages 1188-1233.
    19. Petersen, Mitchell A & Rajan, Raghuram G, 1997. "Trade Credit: Theories and Evidence," The Review of Financial Studies, Society for Financial Studies, vol. 10(3), pages 661-691.
    20. Guariglia, Alessandra, 2008. "Internal financial constraints, external financial constraints, and investment choice: Evidence from a panel of UK firms," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1795-1809, September.
    21. Cull, Robert & Xu, Lixin Colin, 2005. "Institutions, ownership, and finance: the determinants of profit reinvestment among Chinese firms," Journal of Financial Economics, Elsevier, vol. 77(1), pages 117-146, July.
    22. Raymond Fisman & Inessa Love, 2003. "Trade Credit, Financial Intermediary Development, and Industry Growth," Journal of Finance, American Finance Association, vol. 58(1), pages 353-374, February.
    23. Maccini, Louis J. & Moore, Bartholomew & Schaller, Huntley, 2015. "Inventory behavior with permanent sales shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 290-313.
    24. Richard Pike & Nam Sang Cheng & Karen Cravens & Dawne Lamminmaki, 2005. "Trade Credit Terms: Asymmetric Information and Price Discrimination Evidence From Three Continents," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(5-6), pages 1197-1236.
    25. Lin William Cong & Haoyu Gao & Jacopo Ponticelli & Xiaoguang Yang, 2019. "Credit Allocation Under Economic Stimulus: Evidence from China," The Review of Financial Studies, Society for Financial Studies, vol. 32(9), pages 3412-3460.
    26. Mike Burkart & Tore Ellingsen, 2004. "In-Kind Finance: A Theory of Trade Credit," American Economic Review, American Economic Association, vol. 94(3), pages 569-590, June.
    27. Allen, Franklin & Qian, Jun & Qian, Meijun, 2005. "Law, finance, and economic growth in China," Journal of Financial Economics, Elsevier, vol. 77(1), pages 57-116, July.
    28. Asli Demirgüç-Kunt & Ross Levine (ed.), 2018. "Finance and Growth," Books, Edward Elgar Publishing, number 17120.
    29. Emery, Gary W., 1987. "An Optimal Financial Response to Variable Demand," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 22(2), pages 209-225, June.
    30. World Bank, 2019. "Finance for Growth," World Bank Publications - Reports 33563, The World Bank Group.
    31. Felipe Restrepo & Lina Cardona‐Sosa & Philip E. Strahan, 2019. "Funding Liquidity without Banks: Evidence from a Shock to the Cost of Very Short‐Term Debt," Journal of Finance, American Finance Association, vol. 74(6), pages 2875-2914, December.
    32. Chen, Shenglan & Ma, Hui & Wu, Qiang, 2019. "Bank credit and trade credit: Evidence from natural experiments," Journal of Banking & Finance, Elsevier, vol. 108(C).
    33. Horowitz, J., 1996. "Bootstrap Critical Values For Tests Based On The Smoothed Maximum Score Estimator," SFB 373 Discussion Papers 1996,44, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    34. Chen, Minjia & Guariglia, Alessandra, 2013. "Internal financial constraints and firm productivity in China: Do liquidity and export behavior make a difference?," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1123-1140.
    35. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    36. Anil K Kashyap & Owen A. Lamont & Jeremy C. Stein, 1994. "Credit Conditions and the Cyclical Behavior of Inventories," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 565-592.
    37. Plamen Nikolov, 2013. "Inventory developments in the euro area since the onset of the crisis," Quarterly Report on the Euro Area (QREA), Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, vol. 12(2), pages 33-38, June.
    38. Nilsen, Jeffrey H, 2002. "Trade Credit and the Bank Lending Channel," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(1), pages 226-253, February.
    39. Zhang, Jin & Wang, Lanfang & Wang, Susheng, 2012. "Financial development and economic growth: Recent evidence from China," Journal of Comparative Economics, Elsevier, vol. 40(3), pages 393-412.
    40. Alberto Abadie & Guido W. Imbens, 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(1), pages 1-11, January.
    41. Guariglia, Alessandra & Yang, Junhong, 2016. "A balancing act: Managing financial constraints and agency costs to minimize investment inefficiency in the Chinese market," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 111-130.
    42. Stefania Cosci & Roberto Guida & Valentina Meliciani, 2020. "Does trade credit really help relieving financial constraints?," European Financial Management, European Financial Management Association, vol. 26(1), pages 198-215, January.
    43. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    44. Love, Inessa & Preve, Lorenzo A. & Sarria-Allende, Virginia, 2007. "Trade credit and bank credit: Evidence from recent financial crises," Journal of Financial Economics, Elsevier, vol. 83(2), pages 453-469, February.
    45. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    46. Liang, Qi & Teng, Jian-Zhou, 2006. "Financial development and economic growth: Evidence from China," China Economic Review, Elsevier, vol. 17(4), pages 395-411.
    47. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    48. Robert E. Carpenter & Steven M. Fazzari & Bruce C. Petersen, 1994. "Inventory (Dis)Investment, Internal Finance Fluctuations, and the Business Cycle," Macroeconomics 9401001, University Library of Munich, Germany.
    49. Hall, Peter & Horowitz, Joel L, 1996. "Bootstrap Critical Values for Tests Based on Generalized-Method-of-Moments Estimators," Econometrica, Econometric Society, vol. 64(4), pages 891-916, July.
    50. Alan S. Blinder & Louis J. Maccini, 1991. "Taking Stock: A Critical Assessment of Recent Research on Inventories," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 73-96, Winter.
    51. Wang, Yizhong & Chen, Carl R. & Huang, Ying Sophie, 2014. "Economic policy uncertainty and corporate investment: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 26(C), pages 227-243.
    52. Kim, Kirak, 2020. "Inventory, fixed capital, and the cross-section of corporate investment," Journal of Corporate Finance, Elsevier, vol. 60(C).
    53. Caglayan, Mustafa & Maioli, Sara & Mateut, Simona, 2012. "Inventories, sales uncertainty, and financial strength," Journal of Banking & Finance, Elsevier, vol. 36(9), pages 2512-2521.
    54. Guariglia, Alessandra & Mateut, Simona, 2006. "Credit channel, trade credit channel, and inventory investment: Evidence from a panel of UK firms," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2835-2856, October.
    55. Richard Pike & Nam Sang Cheng & Karen Cravens & Dawne Lamminmaki, 2005. "Trade Credit Terms: Asymmetric Information and Price Discrimination Evidence From Three Continents," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(5‐6), pages 1197-1236, June.
    56. Cull, Robert & Xu, Lixin Colin & Zhu, Tian, 2009. "Formal finance and trade credit during China's transition," Journal of Financial Intermediation, Elsevier, vol. 18(2), pages 173-192, April.
    57. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Does Local Financial Development Matter?," Springer Books, in: Damiano Bruno Silipo (ed.), The Banks and the Italian Economy, chapter 0, pages 31-66, Springer.
    58. Jiri Chod, 2017. "Inventory, Risk Shifting, and Trade Credit," Management Science, INFORMS, vol. 63(10), pages 3207-3225, October.
    59. Hong Ru, 2018. "Government Credit, a Double†Edged Sword: Evidence from the China Development Bank," Journal of Finance, American Finance Association, vol. 73(1), pages 275-316, February.
    60. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    61. Mariassunta Giannetti & Mike Burkart & Tore Ellingsen, 2011. "What You Sell Is What You Lend? Explaining Trade Credit Contracts," The Review of Financial Studies, Society for Financial Studies, vol. 24(4), pages 1261-1298.
    62. Zhicheng Liang, 2006. "Financial Development, Growth, and Regional Disparity in Post-Reform China," WIDER Working Paper Series RP2006-90, World Institute for Development Economic Research (UNU-WIDER).
    63. Jiang, Fuxiu & Jiang, Zhan & Kim, Kenneth A., 2020. "Capital markets, financial institutions, and corporate finance in China," Journal of Corporate Finance, Elsevier, vol. 63(C).
    64. Lee, Yul W. & Stowe, John D., 1993. "Product Risk, Asymmetric Information, and Trade Credit," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 28(2), pages 285-300, June.
    65. Meghana Ayyagari & Asli Demirgüç-Kunt & Vojislav Maksimovic, 2010. "Formal versus Informal Finance: Evidence from China," The Review of Financial Studies, Society for Financial Studies, vol. 23(8), pages 3048-3097, August.
    66. Becker, Bo, 2007. "Geographical segmentation of US capital markets," Journal of Financial Economics, Elsevier, vol. 85(1), pages 151-178, July.
    67. Robert E. Carpenter & Steven M. Fazzari & Bruce C. Petersen, 1998. "Financing Constraints And Inventory Investment: A Comparative Study With High-Frequency Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 513-519, November.
    68. Robert E. Carpenter & Steven M. Fazzari & Bruce C. Petersen, 1994. "Inventory Investment, Internal-Finance Fluctuation, and the Business Cycle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 75-138.
    69. Gian Luca Clementi & Hugo A. Hopenhayn, 2006. "A Theory of Financing Constraints and Firm Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 229-265.
    70. Chee K. Ng & Janet Kiholm Smith & Richard L. Smith, 1999. "Evidence on the Determinants of Credit Terms Used in Interfirm Trade," Journal of Finance, American Finance Association, vol. 54(3), pages 1109-1129, June.
    71. Alessandra Guariglia & Simona Mateut, 2016. "External finance and trade credit extension in China: does political affiliation make a difference?," The European Journal of Finance, Taylor & Francis Journals, vol. 22(4-6), pages 319-344, April.
    72. Guariglia, Alessandra & Schiantarelli, Fabio, 1998. "Production Smoothing, Firms' Heterogeneity, and Financial Constraints: Evidence from a Panel of UK Firms," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 63-78, January.
    73. Moses Acquaah, 2012. "Social networking relationships, firm‐specific managerial experience and firm performance in a transition economy: A comparative analysis of family owned and nonfamily firms," Strategic Management Journal, Wiley Blackwell, vol. 33(10), pages 1215-1228, October.
    74. Degryse, Hans & Lu, Liping & Ongena, Steven, 2016. "Informal or formal financing? Evidence on the co-funding of Chinese firms," Journal of Financial Intermediation, Elsevier, vol. 27(C), pages 31-50.
    75. Thorsten Beck & Asli Demirgüç‐Kunt & Vojislav Maksimovic, 2005. "Financial and Legal Constraints to Growth: Does Firm Size Matter?," Journal of Finance, American Finance Association, vol. 60(1), pages 137-177, February.
    76. Berkowitz, Daniel & Lin, Chen & Ma, Yue, 2015. "Do property rights matter? Evidence from a property law enactment," Journal of Financial Economics, Elsevier, vol. 116(3), pages 583-593.
    77. Bose, Udichibarna & Filomeni, Stefano & Mallick, Sushanta, 2021. "Does bankruptcy law improve the fate of distressed firms? The role of credit channels," Journal of Corporate Finance, Elsevier, vol. 68(C).
    78. Mr. Alexander Massara & André Mialou, 2014. "Assessing Countries’ Financial Inclusion Standing - A New Composite Index," IMF Working Papers 2014/036, International Monetary Fund.
    79. Ren, Shenggang & Cheng, Yingmei & Hu, Yucai & Yin, Chao, 2021. "Feeling right at home: Hometown CEOs and firm innovation," Journal of Corporate Finance, Elsevier, vol. 66(C).
    80. Song, Wonho & Wang, Yunjong, 2006. "Finance and Economic Development in China," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 10(1), pages 161-184, June.
    81. Alessandra Guariglia, 2000. "Inventory Investment and Capital Market Imperfections: a Generalization ofthe Linear Quadratic Inventory Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(2), pages 223-242, May.
    82. Levine, Ross & Lin, Chen & Xie, Wensi, 2018. "Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 53(4), pages 1441-1477, August.
    83. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    84. Li, Guangzhong & Li, Jie & Zheng, Ying & Egger, Peter H., 2021. "Does property rights protection affect export quality? Evidence from a property law enactment," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 811-832.
    85. Butler, Alexander W. & Cornaggia, Jess, 2011. "Does access to external finance improve productivity? Evidence from a natural experiment," Journal of Financial Economics, Elsevier, vol. 99(1), pages 184-203, January.
    86. Yousha Liang & Kang Shi & Lisheng Wang & Juanyi Xu, 2017. "Local Government Debt and Firm Leverage: Evidence from China," Asian Economic Policy Review, Japan Center for Economic Research, vol. 12(2), pages 210-232, July.
    87. Sylviane GUILLAUMONT JEANNENEY & PING HUA & ZHICHENG LIANG, 2006. "Financial Development, Economic Efficiency, And Productivity Growth: Evidence From China," The Developing Economies, Institute of Developing Economies, vol. 44(1), pages 27-52, March.
    88. Nicholas R. Lardy, 2014. "Markets over Mao: The Rise of Private Business in China," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6932, April.
    89. Boyreau-Debray, Genevieve, 2003. "Financial intermediation and growth - Chinese style," Policy Research Working Paper Series 3027, The World Bank.
    90. Arup Daripa & Jeffrey Nilsen, 2011. "Ensuring Sales: A Theory of Inter-firm Credit," American Economic Journal: Microeconomics, American Economic Association, vol. 3(1), pages 245-279, February.
    91. Ge, Ying & Qiu, Jiaping, 2007. "Financial development, bank discrimination and trade credit," Journal of Banking & Finance, Elsevier, vol. 31(2), pages 513-530, February.
    92. Justin Murfin & Ken Njoroge, 2015. "The Implicit Costs of Trade Credit Borrowing by Large Firms," The Review of Financial Studies, Society for Financial Studies, vol. 28(1), pages 112-145.
    93. Zeng, Jing & Wang, Xiongyuan & Xiao, Min, 2019. "The impact of government property right law on collateral loans: A quasi-natural experiment based on the enactment of Chinese property law," International Review of Economics & Finance, Elsevier, vol. 63(C), pages 273-283.
    94. Joel L. Horowitz, 1996. "Bootstrap Critical Values for Tests Based on the Smoothed Maximum Score Estimator," Econometrics 9603003, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jingzhu Chen & Yuemei Ji, 2022. "Is Finance Good for Growth? New Evidence from China," CESifo Working Paper Series 9882, CESifo.
    2. He, Ye & Hu, Weiping & Li, Kunwang & Zhang, Xiao, 2022. "Can real options explain the impact of uncertainty on Chinese corporate investment?," Economic Modelling, Elsevier, vol. 115(C).
    3. Chiu, Sheng-Hsiung & Lin, Tzu-Yu & Pan, Lu, 2024. "External financing sensitivities and inefficient R&D investment: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PA).
    4. Ding, Qian & Huang, Jianbai & Chen, Jinyu, 2023. "Does digital finance matter for corporate green investment? Evidence from heavily polluting industries in China," Energy Economics, Elsevier, vol. 117(C).
    5. Zannatus Saba, 2024. "Layoffs and corporate performance: evidence based on the US tech industry," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(3), pages 644-667, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alessandra Guariglia & Simona Mateut, 2011. "Political affiliation and trade credit extension by Chinese firms," Discussion Papers 11/12, University of Nottingham, GEP.
    2. Abdulla, Yomna & Dang, Viet Anh & Khurshed, Arif, 2020. "Suppliers' listing status and trade credit provision," Journal of Corporate Finance, Elsevier, vol. 60(C).
    3. Chen, Minjia & Guariglia, Alessandra, 2013. "Internal financial constraints and firm productivity in China: Do liquidity and export behavior make a difference?," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1123-1140.
    4. Abdulla, Yomna & Dang, Viet Anh & Khurshed, Arif, 2017. "Stock market listing and the use of trade credit: Evidence from public and private firms," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 391-410.
    5. Mariarosaria Agostino & Francesco Trivieri, 2014. "Does trade credit play a signalling role? Some evidence from SMEs microdata," Small Business Economics, Springer, vol. 42(1), pages 131-151, January.
    6. Liu, Qigui & Luo, Jinbo & Tian, Gary Gang, 2016. "Managerial professional connections versus political connections: Evidence from firms' access to informal financing resources," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 179-200.
    7. Tsuruta, Daisuke & Uchida, Hirofumi, 2019. "The real driver of trade credit," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    8. Guariglia, Alessandra & Liu, Xiaoxuan & Song, Lina, 2011. "Internal finance and growth: Microeconometric evidence on Chinese firms," Journal of Development Economics, Elsevier, vol. 96(1), pages 79-94, September.
    9. Cao, Zhangfan & Chen, Steven Xianglong & Lee, Edward, 2022. "Does business strategy influence interfirm financing? Evidence from trade credit," Journal of Business Research, Elsevier, vol. 141(C), pages 495-511.
    10. Ding, Sai & Guariglia, Alessandra & Knight, John, 2013. "Investment and financing constraints in China: Does working capital management make a difference?," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1490-1507.
    11. Maria Cristina Arcuri & Raoul Pisani, 2021. "Is Trade Credit a Sustainable Resource for Medium-Sized Italian Green Companies?," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    12. Bai, Min & Cai, Jifu & Qin, Yafeng, 2021. "Ownership discrimination and private firms financing in China," Research in International Business and Finance, Elsevier, vol. 57(C).
    13. Bougheas, Spiros & Mateut, Simona & Mizen, Paul, 2009. "Corporate trade credit and inventories: New evidence of a trade-off from accounts payable and receivable," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 300-307, February.
    14. Wei Yang & Haiyang Li & Gaowen Kong & Dongmin Kong, 2021. "Access to finance and SMEs’ trade credit: evidence from a regression discontinuity design," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2997-3029, June.
    15. Box, Travis & Davis, Ryan & Hill, Matthew & Lawrey, Chris, 2018. "Operating performance and aggressive trade credit policies," Journal of Banking & Finance, Elsevier, vol. 89(C), pages 192-208.
    16. McGuinness, Gerard & Hogan, Teresa & Powell, Ronan, 2018. "European trade credit use and SME survival," Journal of Corporate Finance, Elsevier, vol. 49(C), pages 81-103.
    17. Ala’a Adden Abuhommous & Tareq Mashoka, 2018. "A dynamic approach to accounts receivable: the case of Jordanian firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 171-191, June.
    18. Yufen Wei & Qigui Liu & Jinbo Luo, 2023. "How does corporate social responsibility have influence on firms' access to trade credit," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1321-1349, April.
    19. Guariglia, Alessandra & Mateut, Simona, 2006. "Credit channel, trade credit channel, and inventory investment: Evidence from a panel of UK firms," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2835-2856, October.
    20. Wenwu Cai & Xiaofeng Quan & Gary Gang Tian, 2023. "Local Corruption and Trade Credit: Evidence from an Emerging Market," Journal of Business Ethics, Springer, vol. 185(3), pages 563-594, July.

    More about this item

    Keywords

    Financing choice; Trade credit; Bank loans; Inventories; Financial development; Financing constraints;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G3 - Financial Economics - - Corporate Finance and Governance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:not:notgep:2020-14. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Hilary Hughes (email available below). General contact details of provider: https://edirc.repec.org/data/cgnotuk.html .

    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.