Firm Power in Industrial Chain and Debt Financing

Nicolas Diodji Mamadou Faye, Libo Fan, Conghui Hu, Kokou Wotodjo Tozo and Mouanda-Mouanda Gilhaimé

International Journal of Science and Business, 2020, vol. 4, issue 2, 1-30

Abstract: This article explores the impact of corporate value chain power on its external financing liabilities, public debt financing, and corporate performance. This study has collected cross-sectional data of 13,653 firms from the Corporate Bond Market from 2006 to 2016. The results show that the companies with greater power in the value chain have a lower proportion of financing liabilities. This finding indicates that companies with higher value chain power use less financing liabilities and tend to use non-cost commercial credit for financing. The empirical results show that although there is no significant relationship between the power of the corporate value chain and the convenience of public bond financing in all samples, for small-scale and high-growth enterprises, the greater the value chain power, the greater the scale of bond financing, the greater the cost, the lower the bond issue cost. Finally, this article reveals that small-scale, high-growth companies with higher value chain power have better financial performance.

Keywords: orporate Value Chain Power; Industry Chain; Debt Structure; Bond Financing; Corporate Performance (search for similar items in EconPapers)
Date: 2020
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