Corporate financialization matters trade credit financing: Evidence from China’s non-financial listed companies

Xiaohua Huang, Benhuan Nie and Zhehao Huang
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Xiaohua Huang: School of Economics and Statistics, Guangzhou University, Guangzhou, China
Benhuan Nie: School of Economics and Statistics, Guangzhou University, Guangzhou, China
Zhehao Huang: Guangzhou Institute of International Finance, Guangzhou University, Guangzhou, China

Economic Analysis Letters, 2024, vol. 3, issue 3, 32-45

Abstract: This study empirically examines the influence of corporate financialization on trade credit financing, focusing on non-financial companies listed in China's A-share market from 2010 to 2022. The results indicate that as corporate financialization increases, companies will obtain less trade credit financing. Further incorporating moderating factors like market position and financing constraints, we find that a higher market position effectively mitigates the negative impact of corporate financialization on trade credit financing, whereas higher financing constraints exacerbate the adverse effects of corporate financialization on trade credit financing. Additional analysis shows that corporate financialization negatively affects trade credit financing by crowding out main business performance and increasing operational risks. Moreover, corporate financialization more strongly inhibits trade credit financing in state-owned companies.

Keywords: Corporate financialization; Trade credit financing; Market position; Financing constraint (search for similar items in EconPapers)
Date: 2024
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