Trade credit in China: Exploring the link between short term debt and payables

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dc.contributor.author Tang, Ying
dc.contributor.author Moro, Andrea
dc.date.accessioned 2020-01-28T16:09:19Z
dc.date.available 2020-01-28T16:09:19Z
dc.date.issued 2019-11-04
dc.identifier.citation Tang Y, Moro A (2020) Trade credit in China: Exploring the link between short term debt and payables. Pacific-Basin Finance Journal, Volume 59, February 2019, Article number 101240 en_UK
dc.identifier.issn 0927-538X
dc.identifier.uri https://doi.org/10.1016/j.pacfin.2019.101240
dc.identifier.uri http://dspace.lib.cranfield.ac.uk/handle/1826/15031
dc.description.abstract Trade credit constitutes an essential element of short-term financing for most firms, especially for small and medium-sized enterprises. This paper investigates the dynamics between short-term bank debt and payables among 1525 Chinese small and medium-sized listed companies over the period of 2008–2016. The results suggest that an increase in stock and receivables is financed by both bank credit and payables. In addition, we find that bank credit and payables substitute each other. We also uncover a strong substitution effect among weak firms, possibly linked to the fact that weak firms struggle to access additional bank finance and thus are forced to rely on suppliers to support their growth. The substitution effect between payables and bank credit is robust to different cash conversion cycles and to the firm's liquidity. en_UK
dc.language.iso en en_UK
dc.publisher Elsevier en_UK
dc.rights Attribution-NonCommercial-NoDerivatives 4.0 International *
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/4.0/ *
dc.subject Trade credit en_UK
dc.subject Short-term debt en_UK
dc.subject Payables en_UK
dc.subject SME en_UK
dc.title Trade credit in China: Exploring the link between short term debt and payables en_UK
dc.type Article en_UK


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