Accounting information transparency and corporate capital turnover: the role of trade credit

Yang Sun and Xiaoling Huang

Finance Research Letters, 2025, vol. 83, issue C

Abstract: Exploiting a research sample comprising listed enterprises in China from 2014 to 2024, we explore the far-reaching impacts of accounting information transparency on corporate capital turnover ratio. The findings reveal that accounting information transparency can greatly enhance firm’s capital turnover and a key economic mechanism underlying this relationship is trade credit. The positive effect of accounting information transparency is more evident for non-state-owned firms and younger firms. These results remain robust after dealing with various sensitivity and endogeneity tests. This paper deepens our understanding of the importance of accounting information transparency for improving firm capital utilization efficiency.

Keywords: Information transparency; Capital turnover; Trade credit; Efficiency (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009523

DOI: 10.1016/j.frl.2025.107693

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