Unleashing Industry 4.0: Empowering corporate trade credit

Penghua Qiao, Kaizhong Qiu, Anna Fung and Hung-Gay Fung

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: Utilizing panel data from publicly listed Chinese manufacturing firms spanning 2013 to 2022, our research demonstrates a direct correlation between the adoption of Industry 4.0 technology and improvements in trade credit. Industry 4.0 also bolsters firms' total factor productivity and internal controls, thereby catalyzing the expansion of trade credit. Notably, this positive effect is accentuated in environments with favorable commercial credit conditions and a lower prevalence of alcohol consumption, particularly within firms guided by top management teams with a strong technological background and a commitment to social responsibility. Through these findings, our study illuminates the pivotal role of Industry 4.0 technology in shaping corporate trade credit dynamics.

Keywords: Industry 4.0 technology; Trade credit; Total factor productivity; Internal control (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s154461232401184x

DOI: 10.1016/j.frl.2024.106155

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