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

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dc.contributor.authorTang, Ying
dc.contributor.authorMoro, Andrea
dc.date.accessioned2020-01-28T16:09:19Z
dc.date.available2020-01-28T16:09:19Z
dc.date.issued2019-11-04
dc.description.abstractTrade 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.identifier.citationTang Y, Moro A. (2020) Trade credit in China: Exploring the link between short term debt and payables. Pacific-Basin Finance Journal, Volume 59, February 2020, Article number 101240en_UK
dc.identifier.issn0927-538X
dc.identifier.urihttps://doi.org/10.1016/j.pacfin.2019.101240
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/15031
dc.language.isoenen_UK
dc.publisherElsevieren_UK
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/*
dc.subjectTrade crediten_UK
dc.subjectShort-term debten_UK
dc.subjectPayablesen_UK
dc.subjectSMEen_UK
dc.titleTrade credit in China: Exploring the link between short term debt and payablesen_UK
dc.typeArticleen_UK

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